Q2 STOCKS TO BUY

Nike Stock Scores New Highs After Bull Note

NKE options are affordably priced at the moment

Deputy Editor
Aug 19, 2020 at 9:35 AM
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The shares of Nike Inc (NYSE:NKE) are hovering up 1.2% at $108.20 at last check, after a price-target hike from Stifel to $140 from $122. The firm cited more demand for athletic footwear than expected, given the state of the pandemic, and promising potential earnings.

On the charts, a 9.5% monthly gain has helped Nike stock reclaim its year-to-date breakeven level. For most of the summer, the shares have relied on the $97 level --with their 200-day moving average just below -- as a stable floor.

Analysts are bullish on Nike stock, with 22 out of the 27 in coverage at a "buy" or better rating. Coming into today, the 12-month consensus price target of $112.79 is a 5.4% premium to current levels. Also worth noting is the equity's 14-day Relative Strength Index (RSI) of 68, on the cusp of overbought territory. This means the stock a short-term breather could be in the cards for NKE. 

In the options pits, calls have more than tripled puts in the last 10 days. This is per NKE's 10-day call/put volume ratio of 3.41 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than all but 2% of readings from the past year, meaning options traders have rarely been more bullish. 

That said, the stock is seeing attractively-priced premiums as well. Nike stock's Schaeffer's Volatility Index (SVI) of 26% stands higher than just 9% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment. 

 
 

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