We saw a lot of mixed price action in the market last week.
Some stocks are breaking to new highs, some are sliding lower as traders take profits and some are consolidating as traders wait for more news.
Nike (NYSE:NKE) is currently one of the consolidating stocks.
After reaching a high of $147.95 on Dec. 21, 2020, NKE has been consolidating in a large triangle pattern with a down-trending resistance level and an up-trending support level.
NKE has a tendency to consolidate in the run up to its earnings announcements, and we anticipate the stock is going to continue bouncing back and forth within this current consolidation range as we approach the company’s next earnings announcement on March 18th, after the closing bell.
Daily Chart of Nike (NKE) – Chart Source: TradingView
To take advantage of this consolidation, we recommend selling to open a new put write on NKE.
We suggest setting a strike price that lines up well with the support level NKE established on Jan. 27 and the bullish breakout the stock experienced on Nov. 17.
We’d also suggest a mid-March expiration because it comes after the company’s earnings announcement, which means it provides some added premium.
On the date of publication, John Jagerson & Wade Hansen did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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