Watch These Nike Price Levels as Stock Jumps on Surprise Sales Growth, Earnings Beat

Nike (NKE) shares jumped in early trading Wednesday after the sports apparel and equipment maker posted surprise sales growth and topped Wall Street’s earnings expectations.

The company said revenue grew 1% in the fiscal first quarter from a year earlier, well above its prior guidance of a mid-single-digit percentage decline. Adjusted earnings per share came in at $0.49, compared with the $0.26 analysts had expected.

Nike, which is undergoing an ambitious turnaround effort, cited strength in its wholesale, running, and North American businesses, which offset weaker sales in China. The company cautioned that it anticipates holiday season sales to fall, and that it now expects a $1.5 billion hit from tariffs in the current fiscal year, up from the $1 billion it had projected in June. 

Heading into the report, Nike shares had lost 8% since the start of the year, pressured by concerns over the company’s high exposure to tariffs and uncertainty about the execution of its turnaround. The stock was up nearly 4% at around $72.50 in recent trading.

Below, we take a closer look at Nike’s chart and use technical analysis to identify important price levels that investors will likely be watching.

Falling Wedge Breakout

Over the past month, Nike shares have traded lower within a falling wedge but look set to break out from the pattern on Wednesday.

It’s worth noting the stock found buying interest ahead of the report around the closely watched 200-day moving average, a move that coincided with the relative strength index climbing out of oversold territory.

In another win for the bulls, the 50-day MA crossed back above the 200-day MA in mid-August to form a golden cross, a bullish chart pattern that signals a new uptrend.

Let’s identify three important overhead areas to watch on Nike’s chart if the shares see extended earning-driven buying and also point out support levels worth monitoring during future retracements.

Important Overhead Areas to Watch

The first overhead area to watch sits around the psychological $80 level. This location could provide resistance near the top of the falling wedge pattern and a trendline that connects a range of corresponding trading activity on the chart stretching back to the prominent June 2024 stock gap.

A close above this level could see the shares make a move toward $90. Investors may decide to lock in profits in this region near the 2024 September peak, which also aligns with the lower levels of a trading range that formed on the chart last year between April and May.

Further buying could fuel a rally to around $98. The shares would likely run into selling pressure in this area near the March 2024 trough and several peaks spanning from April to June of that year.

Crucial Support Levels Worth Monitoring

During future pullbacks in the stock, investors should initially keep an eye on the $71 level. This location, currently sitting just above the 200-day MA, could attract buy orders near multiple troughs on the chart between July last year and July this year.

Finally, a deeper retracement could see Nike shares revisit lower support around $63. Investors may look to accumulates shares in this location near a trendline that links a series on price action on the chart between March and June.

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As of the date this article was written, the author does not own any of the above securities.