Traders appear to have already taken off for the longer holiday weekend as volume on a number of sectors has dropped significantly. Despite that, we’re seeing some strength in athletic stocks lately that has been capped by today’s earnings news from Nike Inc. (NYSE:NKE).
Today’s three big stock charts look at the charts for NKE, Under Armour Inc (NYSE:UAA) and Lululemon Athletica Inc. (NASDAQ:LULU) as the athletic-based retail stocks are looking ready to run higher.
Nike Inc (NKE)
![Nike Inc (NKE)](https://investorplace.com/wp-content/plugins/lazy-load/images/1x1.trans.gif)
Nike released earnings this morning that were better than expected by The Street. The news was tempered by some lowered guidance, but there was another positive in the report regarding a new collaboration with Amazon.com, Inc. (NASDAQ:AMZN). The news has NKE shares surging higher, breaking into a bullish pattern.
- This morning’s 5%-plus jump takes out the most recent highs for Nike stock that were made in earlier June when it ran into resistance at $55. This breaks a pattern of lower highs and lows for the stock, which will attract more technical buyers.
- NKE shares have broken well above their top Bollinger Band on today’s move. This suggests that we will see the stock rally in a fast and aggressive move while the market piles into this new technical trend.
- The move in Nike stock also breaks the stock into a long-term bull market trend as this month will see the stock close above its 20-month moving average for the first time since May 2016. This will put NKE shares on long-term investor’s radar screen as a bull.
![NKE](https://investorplace.com/wp-content/plugins/lazy-load/images/1x1.trans.gif)
Under Armour Inc (UAA)
![Under Armour Inc (NYSE:UAA)](https://investorplace.com/wp-content/plugins/lazy-load/images/1x1.trans.gif)
Under Armor shares have spent almost the entire year trying to recover from their February earnings dive.
After building what looks to be a long-term bottom, UAA stock is now improving its technical outlook and it is worthy of consideration for a longer-term technical play.
- Just last week, Under Armor stock completed its first successful test of its 50-day moving average since July 2016. This indicates that the technical traders are now stepping in to support the trend.
- The 50-day moving average for UAA shares is now transitioned completely into a bullish trend. This suggests that the price target, from a technical perspective, has been raised. Our models are suggesting $23 as the next short-term tradable target.
- The current short interest ratio for Under Armor stands at 6.3, which suggests that the stock could benefit from a short covering rally that would target the same $23 price target.
Lululemon Athletica Inc. (LULU)
![Lululemon Athletica Inc. (LULU)](https://investorplace.com/wp-content/plugins/lazy-load/images/1x1.trans.gif)
Like UAA, Lululemon Athletica’s year has been rough as the stock has been fighting to get back into a bullish trend that would attract more buyers.
After consolidating at $52 and building a base, LULU stock appears to finally be on its way to higher prices.
- Since the beginning of April, Lululemon Athletica stock has put in a trend of higher highs and higher lows on four different occasions. This is indicative of a increasingly strong bullish trend in the stock.
- The 50-day moving average for LULU stock just finished a transition into a bullish trend as the trendline now has a positive slope. Our technical models indicate that the stock now has a 2:1 probability of positing higher prices each day due to this trend.
- Shares are a bit overbought as the stock is now hitting its 200-day moving average, which may exercise some resistance on Lululemon Athletica shares. Our analysis indicates that we are likely to see the stock pull back to $56 as profit-takers may step in to lower the price. This would be a buying opportunity for chart watchers though as the target for LULU shares is currently $65.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.