Trading Nation

The ‘charts are aligned’ for Dow stock Nike to race higher, says Oppenheimer technician

Trading Nation: Nike’s ‘marketing machine’

Nike has been leaving its competitors in the dust, and one technician says the stock will pick up speed.

"The charts are aligned here," Ari Wald, head of technical analysis at Oppenheimer, told CNBC's "Trading Nation" on Monday. "We are bullish on Nike on the prospect of what we think is going to be a big breakout above the $68 level."

Shares of the athletic apparel maker are up more than 5 percent this year, making it one of the top performing Dow stocks. The stock hit a new all-time intraday high of $68.83 on Jan. 31, and it could break even firmly higher, says Wald.

"We are seeing some signs of greater relative strength. We are seeing signs of the trends improving," he said. "It's got a rising 200-day moving average now so I think with a resumption of market strength here as well, those top-down tailwinds, I think Nike is set up for that breakout."

Nike shares are trading around $66.17 a share, roughly 4 percent from all-time highs. Its 200-day moving average has been on the rise since mid-2017.

For BK Asset Management's Boris Schlossberg, Nike's fundamental picture looks strong, particularly as it ramps up its competitive edge. Its shoe line remains in high demand, it has gone head-to-head with Under Armour in the athleisure space and its new membership concept should build brand loyalty, Schlossberg says.

"If there's ever a marketing hall of fame, Nike has got to be the top candidate for the job," Schlossberg, managing director of FX strategy, said on "Trading Nation." "They're going to be very competitive on all fronts. The stock looks very good because after a couple of years of consolidation, it's broken out to the topside."

The Dow has been battered over the past two weeks, falling 7.5 percent in February and briefly dipping into correction territory last week. Nike declined by half the Dow's total drop in the past week and is one of roughly a third of the not currently in a correction.

Most analysts are bullish on Nike. Those surveyed by FactSet have an average rating of overweight on the stock. An average price target of $67.52 implies 2 percent upside from current levels. Susquehanna Financial Group has the lowest price target at $57 and Atlantic Equities the highest at $79.

Nike shares were little changed at $66.02 a share on Tuesday morning.