Shorting NKE: part 18
questions, questions, questions...
Sometime around 415 EST Nike will report earnings an dforecasts ad thewn there is supposed to be a Q&A with the CEO and CFO.
Analysts will ask previously submitted questions.
Yes, it is part theater.
The exercise most analysts face is one where they are asked to see themselves as Diane Sawyer and determine which questions they are most wanting answered so that the true story of what has happened, what is happening, and what is being planned is clear so that investors, traders, lenders, stakeholders, partners, employees, speculators, exchanges, bankers, and humans can make an assessment on Nike.
The problem, though, is that 20th century traders knew a different world where platforms like Robinhood or Think or Swim or Tasty trade did not exist and allow 24-hour trading on NKE.
Like LULU (Lululemon) a few weeks ago, the results led to a 20% drop immediately which has stuck and reinforced the downtrend brands find themselves in.
So, as has happened before, the response might be changed by the Q&A but so far, we have seen NKE trade wildly after the numbers hit the wire.
2 numbers ago the stock traded as high as 81 and as low as 71 before selling off. Last quarter the same happened and the stock traded lower for days until it finally traded its 52-week low in early April.
Reminder: NKE is especially susceptible to trade complications and tariff risks.
It is also critical that we understand the Put:Call ratio.
Essentially it tells us what the sentiment based on Options trading is.
Above 1 and the market is decidedly bearish which means there is a risk of a short squeeze or even a Delta squeeze (rare, very rare until MEME stocks). As of yesterday, the ratio is certainly above 1.
traders do not tend to borrow NKE and sell it because of the Central Bank level interventions that Nike’s buyback program orchestrates. They are the bank of England of stock buyback programs only rivaled by Apple.
Neither have been working.
So, to 415 pm EST today.
To be continued.