What Colin Kaepernick is referring to is buying Nike, $NKE, stock of course. The stock price broke out of an ascending triangle in May and continued higher. It has trended higher ever since. There have been a few pullbacks along the way creating tradeable lows and it may be coming out of one of those now. The last move down towards the 50 day SMA saw a bounce 2 weeks ago. And now it is back at the prior high.
Momentum is bullish with the RSI in the bullish zone and the MACD about to cross up and turn positive. The SMA’s and Bollinger Bands® are all running higher in parallel. There is no resistance above 84. Support lower comes at 82 and 79.40 then 78 and 75.35. Short interest is low at 1%. The stock pays a dividend slightly less than 1% and went ex- on August 31st. The company is expected to report earnings next on September 25th.
The September options chain shows the biggest open interest at the 80 strike on the put side and the 85 strike on the call side. The September 28 Expiry options, covering the earnings report, show the biggest open interest at the 83 strike with some size also at the 82 calls. October monthly options show bigger open interest on the call side, and spread from 77.50 to 85 before starting to tail off. On the put side it is biggest at 77.50 and 80.
Trade Idea 1: Buy the stock on a move over 84 with a stop at 82.
Trade Idea 2: Buy the stock on a move over 84 and add a September 28 Expiry 83/80 Put Spread ($1.10) while selling the October 87.50 Calls ($1.20) to pay for the protection.
Trade Idea 3: Buy the September 28 Expiry/October 87.50 Call Calendar (42 cents) and sell the September 28 Expiry 77.50 Put for free.
Trade Idea 4: Buy the October 80/85 bull Risk Reversal for 85 cents.
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