Nike, Inc. (NKE) shares jumped more than 6% in early trading on Friday morning after the company reported strong fourth quarter financial results. Revenue rose 5.3% to $8.68 billion, beating consensus estimates by $40 million, and earnings per share of 60 cents beat consensus by 10 cents per share. The company also expects mid- to high-single-digit sales growth in fiscal 2018, although margins are expected to narrow by about 50 basis points.
In addition to the strong financial results, Nike confirmed a new pilot program with Amazon.com, Inc. (AMZN). The partnership will start with a small product assortment across footwear in the United States, but it could expand to other categories if successful. CEO Mark Parker indicated that the project remains in the early stages, but he added that the team really looks forward to evaluating the results of the pilot program. (See also: Nike to Launch Pilot Program With Amazon, Results Top Estimates.)
On a technical level, the stock broke out from its 50-day moving average, 200-day moving average and pivot point at around $52.90 to R2 resistance at $57.65. The relative strength index (RSI) jumped to an overbought 70.90 from its neutral levels, but the moving average convergence divergence (MACD) experienced a bullish crossover that could suggest further upside over the mid-term to long term if it remains intact.
Traders should watch for shares to re-test their highs at around $60.00, although some consolidation may occur over the next few trading sessions following the dramatic move. The consolidation trading range will likely be between R1 resistance at $55.17 and R2 resistance at $57.65. Traders should maintain a bullish bias in their trades given the MACD movement and the favorable fundamentals underlying the stock's movement. (For more, see: Nike, 'Significant Upside for Long-Term Investors': Guggenheim.)
Charts courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.