Nike, Inc. (NKE) is one of the most recognizable brands on the planet. From Michael Jordan’s famed “Air Jordans” to the University of Oregon’s football jerseys (Nike founder Phil Knight is an alumus), Nike is one of a few companies at the pinnacle of the athletic apparel sector of the economy. The company, which was founded in 1964 and is headquartered in Oregon, employs over 55,000 people and has a market cap of nearly $85 billion. Since hitting a 52-week low of $70.60 last April, NKE was unstoppable as it pushed itself to a 52-week high of $99.76 in early December. Since that time, NKE has held strong and is currently trading at $97.90, just $2 off that 52-week high. The company is expected to report Q3 earnings after the close today and according to TD Ameritrade Chief Stategist JJ Kinahan, there has been a lot of put selling at the March 95 strike price, indicating that investors are bullish on the stock ahead of earnings (Yahoo Finance). The stock has rallied on 5 of the last 8 earnings reports with an average move of about 5%. The chart is decidedly bullish and if it’s bullish earnings history holds true again, we could be looking at a new 52-week high in the athletic apparel giant.
My Trade: I am buying the NKE Mar 101-103 Call Spreads for $0.45
Risk: $45 1 lot
Reward: $155 per 1 lot
Breakeven: $101.45
Andrew Keene
President/Founder
KeeneOnTheMarket.com
