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As Nike falls after earnings, chart suggests 'key juncture' ahead for the stock

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What to look for in Nike's earnings report

Nike fell after the bell Thursday following a mixed quarter.

Earnings of 90 cents a share for its February-ended quarter beat expectations, but port congestion in the U.S. squeezed inventories and pressured sales.

The company emerged as an e-commerce powerhouse during the pandemic. Nike reported a 59% increase in digital sales in its recent quarter, down from 84% growth a quarter earlier.

After a 110% run in a year, the stock is at a "key technical juncture," Miller Tabak chief market strategist Matt Maley said.

"The stock is expensive on a P/E basis, price to earnings, and also price to sales, more importantly. However, I've got to admit on a technical basis it does have some potential here," Maley told CNBC's "Trading Nation" on Thursday before the earnings release.

He highlighted $147 as a critical level, a price point it has bumped up against four times. That level marks resistance for the stock.

"Even though the stock is not oversold, it's kind of in a neutral area, maybe slightly above, but it's not overbought and certainly not as overbought as it has been at recent highs in the last couple of years. So it's kind of at a key technical juncture right now. A break above $147 and it'll run, but wait, just wait for that," said Maley.

Shares closed just above $143 on Thursday.

Nancy Tengler, chief investment officer at Laffer Tengler Investments, sees Nike as well positioned in two opportunity areas — consumer strength and a digital boom. Even so, she is wary of its high valuation.

"It's a bit lofty at a multiple of 47 times 2021 earnings, and a relative price-to-sales ratio near historic highs," she said during the same interview. "On pullbacks, it becomes more interesting, but I wouldn't be chasing it here."

Shares have risen nearly 140% off a 52-week low set last March. Its rise has slowed down this year, though — it is up just over 1% this year, below the S&P 500's 5% gain.

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