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Two Ways: Nike Running Into Headwinds

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Strengthen your portfolio in good times and bad.

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Tough Times in the Town of Nike

Nike (NKE) reported results for its fiscal fourth quarter with earnings of $0.99 a share, beating analysts' expectations by $0.03. But revenues were slightly lower than expected, falling 7.4% year-over-year to $4.71 bln vs. the $4.72 bln consensus.

According to Briefing.com the company said in its conference call that it continues to be a growth company despite the challenges ahead and even though economists are calling a bottom, it will maintain a conservative approach. It expects more headwinds in regards to its gross margins and sees weaker revenues especially in China for the first half of 2010 because of store growth and the Olympics. Gross margins are expected to be a point below 2009 with the most difficult comparisons in the first quarter. Shares are lower by 4% in the premarket.

From the Bull Pen: Bulls can look elsewhere in retail like Family Dollar Stores (FDO). The daily chart shows the stock sitting on its 200 day moving average ($28.30).A sell stop can be set below that level.

From the Bear Cave: Is Nike giving bears a hint on the retail environment? Consider a play in J.Crew (JCG). Keep an eye on this stock to see if it fills the gap. A buy stop can be set 2% above entry.

Quick Check Around the World

Asian trading closed with the Hang Seng 2.14%, India -0.53%, Shanghai 0.09%, Nikkei 2.15%, and Taiwan 1.22%.

Glancing towards Europe, we see the FTSE -0.99%, CAC -1.32%, DAX -1.51%

As of 8:20 AM EST, S&P Futures are trading +0.8 to 898.80 and Nasdaq futures are +3 to 1450.50.

A Look at Commodities

Over in commodities, crude oil is trading +0.69 to 69.36 while gold is +4.00 at 938.40 this morning. Silver is +0.600 to 13.97 and copper +1.20 to 227.95.

The dollar index is +0.170 to 81.0500.

On the Radar

Economics

08:30 Initial Claims
08:30 Q1 GDP Final -5.7% cons

Click here to see the full trading radar.

Thirsty Thursdays! Countdown till happy hour! Good luck!
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No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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