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Nike Could Post New Highs in 2019

Dow component Nike, Inc. (NKE) may complete an intermediate correction in the coming weeks and post new highs in 2019, despite current trade tensions. That would mark quite a feat for the sports apparel manufacturer, which imports many Chinese goods and products on the Trump administration’s tariff list. Fortunately, mitigating factors could turn the tide and lift this issue back into market leadership.

The company has taken steps to diversify into other production hubs in recent years, dampening the tariffs’ potential impact. In addition, enthusiastic customers already pay footwear duties between 11% and 68%, mandated by the Smoot-Hawley Tariff Act of 1930. That tailwind – along with new factories in Vietnam, Cambodia and Indonesia – could help Nike achieve 2019 profit targets and rise to the top of the Dow performance heap. Even so, market players should act defensively until price action completes testing at critical support levels.

NKE Long-Term Chart (1993 – 2018)

Source: TradingView.

NKE Short-Term Chart (2017 – 2018)

Source: TradingView.

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