- Nike stock gains despite market downturn.
- Traders expect Vietnam’s leaders to negotiate a good deal on tariffs.
- The 90-day tariff reprieve ends in early July.
- Nike has overcome the 50-day SMA and could rally toward $74.
Nike (NKE) shares are rising in the face of the gentle market downturn on Tuesday, and some traders might be interested in how to play the premier US sneaker king. NKE stock has transcended its 50-day Simple Moving Average (SMA) in the last several sessions for the first time since March 11, and one wonders if the bottom is in.
Nike stock is up just under 1% at $62.62 as the stock market heads for a close.
The wider market is taking a breather after the long uptrend that has been witnessed since April 9. The Dow Jones Industrial Average (DJIA), which includes Nike in its 30 holdings, has fallen 0.57% at the time of writing. While the S&P 500 and NASDAQ Composite are both about 20 basis points lower.
Nike stock news
Nike laid off some of its tech employees on Tuesday, announcing that it would redeploy some of its tech workflow to outsourced workers. Under CEO Elliott Hill, the company has hired new executives for its strategy, human resources, and sports marketing divisions.
Some traders are noticing that Nike stands to benefit from Dick’s Sporting Goods’ (DKS) acquisition of Foot Locker (FL).
“As NKE CEO Elliott Hill strengthens an already robust relationship with DKS, this consolidation could enhance NKE’s retail presence and brand consistency,” wrote Jeffries analyst Randal Konik in a client note.
Konik said that Nike is the lead footwear brand at both Dick’s and Foot Locker, so it’s ownership of both should lead to greater retail focus on Nike.
Konik wrote more than a week ago that Nike was one of the primary beneficiaries of the US and China agreeing to lower tariffs. Nike only produces about 15% of its products in China.
However, many analysts think this reduction in tariff risk points to better odds of a decent deal for Vietnam. Nike produces the largest quantity of its goods in Vietnam compared with all other countries, and the Trump administration originally placed a 46% tariff on goods from Vietnam before pulling it back to 10%, like most other countries.
Vietnam’s government has been active in meeting the Trump administration halfway, and many expect the country to garner a decent deal before the 90-day tariff rate pause ends in early July.
Nike stock forecast
Nike stock has overcome the 50-day SMA in the past few sessions. This gives it the steam to make a run for the top trendline of the price channel it has traded mostly within since late 2023. Testing the top of the channel would put NKE stock near $74 or above, which adds up to a near 20% gain.
If the market falls or if Vietnam’s tariff deal with the Trump administration fails to succeed, expect Nike stock to return to early April support near $52.50.
NKE daily stock chart
