Trade of the Day: Nike (NKE)

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We’re halfway through September—and, as expected, the stock market has been very volatile. None of the benchmark indices have been able to gain any significant momentum and have been moving in and out of the red daily.

One major concern that has Wall Street skittish continues to be the possibility of a rate hike. This week in particular has investors very anxious with the upcoming Federal Open Market Committee (FOMC) meeting. For months, most of the investing world has been allowing the Fed to dictate their trading strategy; my course of action takes a more logical approach. My strategy isn’t based on opinion or speculation. Instead, I have a plan for every possible market trend.

I base every investing action on data generated by my Turner Analytics database, which crunches data on 5,000+ stocks. And for the past four weeks, the Turner Analytics Market Bias report has been favoring a bear trend. However, the most recent report shows that the strong bearish tailwinds that have been dragging stocks down have pulled back a bit. What this means is that now is a good opportunity to look for fundamentally strong stocks to buy on a dip.

Now, my definition of “fundamentally strong stocks” is a bit stricter these days. Even with the bearish trend pulling back, the market is pretty volatile. So, today, I have a retail stock whose fundamentals have helped stay strong despite the risky market environment.

Nike Inc (NKE) is an athletic apparel/equipment/footwear company that’s a household name, famous for its “Just Do It” motto. Besides having brand recognition, the stock has a stellar score for both fundamentals (70 out of 100) and technicals (90 out of100) in the Turner Analytics database. NKE is also rated as a strong buy and has been on a bullish trend along with its industry (Textile-Apparel Footwear and Accessories), while outperforming its sector (Consumer Discretionary).

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Nike has an exceptional balance sheet, which is a big reason why the stock’s fundamental score is so strong. The company’s debt-to-equity ratio is very low, at 0.10 as of May 2015. In the fourth quarter, Nike profits increased nearly 24% from the previous year, while the stock’s price has jumped more than 36% over the past year. The price has also been holding steady, well above its 200-day moving average for more than a year.

Meanwhile, NKE’s volatility rating is moderate, with an expected move of 4.7%, or $5.34. If the market does not move into a stronger bearish trend, this stock will prove to be a great buy for near-term momentum.

So, I recommend entering Nike stock at $111.82 or better and setting the stop limit at $106.48.

Mike Turner and his team of software engineers developed Turner Analytics, a sophisticated software market and trade-timing system that provides unbiased, quantifiable recommendations on thousands of equities and rates, ranks and scores these equities from best to worst in an easy-to-use on-line tool for individual investors. He is also the editor of Signal Investor.

Most recently, Mike launched Quick Hit Trader. This trading service is based on weekly analysis of the 6,000+ stocks and ETFs in his proprietary Turner Analytics computer stock-rating system. Every Monday before the market open, Mike emails subscribers his three best trades for the week, including the buy, sell and target price.


Article printed from InvestorPlace Media, https://investorplace.com/2015/09/trade-of-the-day-nike-nke/.

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