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Two Ways: Nike Running Into Headwinds


Strengthen your portfolio in good times and bad.

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 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


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.

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