NIKE Outlook - Technical Signals and Market Forces in Conflict

1. Market Snapshot

Takeaway: NIKE is currently in a weak technical position with an internal diagnostic score of 3.64, and recent price activity has fallen by -6.42%—despite analysts being optimistic overall.

2. News Highlights

While most of the recent news is about the luxury real estate and automotive sectors, one key development worth noting is LGI Homes launching a new CompleteHome Plus section in Tucson, Arizona, which could indirectly reflect broader consumer confidence in upscale living options. Another relevant point is Washington State imposing a 10% luxury aircraft tax on planes over $500,000—a signal that the luxury economy is under regulatory pressure, which may impact high-end consumer behavior more broadly.

3. Analyst Views & Fundamentals

The analyst consensus is mixed, with a simple average rating of 4.00 and a performance-weighted rating of 5.94. This indicates that while analysts tend to be optimistic, there is some divergence in views—JP Morgan's recent "Buy" rating stands out against the backdrop of a falling price trend.

Key fundamentals:

• PE Ratio: 100.83 – very high, internal diagnostic score: 2.45
• ROE: 8.29% – relatively low, internal diagnostic score: 2.17
• EV/EBIT: 33.69 – high leverage, internal diagnostic score: 1.14
• Quick Ratio: 1.51 – acceptable liquidity, internal diagnostic score: 5.50
• Net Operating Margin (NPM): 9.41% – moderate, internal diagnostic score: 6.98

These metrics show the fundamentals are mixed at best. The PE and EV/EBIT are red flags, while the quick ratio and NPM are somewhat encouraging. However, the falling revenue and negative cash flow trends are concerning.

4. Money-Flow Trends

Big money is moving out, with block flows negative (internal diagnostic score: 7.64) and large-investor inflow ratios all below 50%. Meanwhile, small retail investors are still showing some optimism, with a small inflow ratio of 50.92% and a positive small trend.

This suggests a divergence in investor sentiment—retail buyers may see some value, but institutional investors are clearly more cautious. The overall inflow ratio is at 47.32%, showing a net outflow across all investor categories.

5. Key Technical Signals

NIKE’s technical outlook is bearish. The key indicators include:

• MACD Death Cross: A bearish signal with an internal diagnostic score of 3.78
• WR Oversold: Mixed signal with an internal diagnostic score of 2.19
• Ex-Dividend Date: Positive event with an internal diagnostic score of 4.30
• Dividend Record Date: Also positive with an internal diagnostic score of 4.30

Chart patterns from recent_indicators_by_date show that the WR Oversold signal has appeared multiple times over the past 5 trading days. While it may hint at short-term overselling, it’s not enough to reverse the bearish bias. The MACD Death Cross from August 28 and the repeated WR Oversold signals suggest a weak momentum environment.

6. Conclusion

With a weak technical score of 3.64 and mixed fundamentals, it’s clear that NIKE is facing headwinds. While there are positive indicators around dividend events and retail inflows, the broader picture is bearish. Given the current signals and price action, investors should consider holding off on new positions and may want to watch for a potential pull-back before making any decisions.