Nike shares are stalling at their current levels, as price just neared the $100/share area. This could lead to a profit-taking opportunity and a potential bounce off the nearby support levels.
At the moment, price appears to be moving sideways around the $97/share area, but MACD is indicating a sharper selloff. The indicator has been in the overbought zone for more than a month, which means that selling pressure is building up. Once this takes hold, Nike shares could move down to the 50 simple moving average, which has held as dynamic support in recent retracements.
Nike Shares Forecast
The 50 SMA is located around the $90/share level, which is also a major psychological support level and a previous area of interest. For now, the shorter-term SMA is still moving above the longer-term SMA anyway, which confirms that the uptrend could carry on.
Further gains could take Nike shares past the $100/share mark, but this might take place later on during the month as the Santa Claus rally could lift US equities and assets. The upcoming FOMC interest rate statement, which will be the last for the year, is also expected to set the tone for market behavior until the start of 2015.
Bear in mind that the latest jobs report showed stronger than expected results but failed to result to strong risk-on moves, as traders quickly booked profits off key levels in anticipation of Fed tightening. After all, an interest rate hike might weigh on lending conditions as it would make loans more expensive, which could limit business investment.
Should the Fed retain its bias for keeping rates low for a considerable time even after easing has ended, US equities could soar to new highs, including Nike shares. This would promise easy business conditions and strong demand, ensuring that the economy stays on track to recover.
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