Filed under: Major movement, Analyst reports, Good news, NIKE, Inc’B’ (NKE), Options, Technical Analysis

Nike Inc. (NYSE: NKE) shares are rising today after a Citi analyst reiterated the stock at Buy ahead of next week’s earnings report. Also, an analyst with HSBC said he prefers investing in the stock over competitors Puma and Adidas in European markets. If you think that the company won’t fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on NKE.

After hitting a one-year low of $51.37 last March, the stock hit a one-year high of $67.93 in December. NKE opened this morning at $58.00. So far today the stock has hit a low of $58.00 and a high of $59.81. As of 12:40, NKE is trading at $59.80, up $1.88 (3.2%). The chart for NKE looks bearish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a March bull-put credit spread below the $55 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn’t do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in just one week as long as NKE is above $55 at March expiration. Nike would have to fall by more than 8% before we would start to lose money.

Continue reading Nike (NKE) lifted by analyst comments going into earnings

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This entry was posted on Wednesday, March 12th, 2008 at 2:36 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.