Nike Stock Has Room To Run

NKE options are attractively priced to boot

Aug 7, 2018 at 10:15 AM
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Dow component Nike Inc (NYSE:NKE) came into 2018 surrounded by pessimism, illustrated by a negative Barron's cover in late 2017 that was accompanied with a story telling investors to avoid the company because of weak sneaker sales -- a headline that nearly corresponded with a bottom in the stock price. NKE shares have responded by adding close to 26% year-to-date, thanks in part to a late-June earnings beat. The stock jumped to record highs, getting an extra boost from the company's huge buyback plans.

On its journey up the charts this year, Nike has been aided by periodic upgrades out of the analyst community, but the majority in coverage still have "hold" or "sell" ratings on the equity. With such potential still left for more upbeat analyst attention, the bull case is still in place on NKE. And with the shares riding atop the supportive 40-day moving average at the moment, the charts suggest now is a good time to strike.

 

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Options premiums look attractive at the moment, too. That's based on the security's Schaeffer's Volatility Index (SVI) of 20%, which ranks in just the 20th annual percentile, showing muted volatility expectations for short-term options.

Subscribers to Schaeffer's Weekend Trader Alert options recommendation service received this NKE commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader Alert is one of our most popular options trading services.

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