The Actual Recommended Nike Inc Weekly Options Trade.....
** OPTION TRADE: Buy NKE OCT
01 2021 155.000 PUTS at approximately $3.50.
(Actually bought for $3.60)
NOTE: The actual entry and
exit prices will vary among individual traders – this will depend on their risk
tolerance and exit strategy.
Nike Inc Weekly Options Trade
On Tuesday, September 14, 2021, “Weekly Options Members,” entered the Nike Inc Weekly Options
trade mentioned above for $3.60 shortly after the market opened.
Yesterday, Monday, September
27, 2021, at 1:00pm (approx.) the price of the option hit $7.76 – up 116%.
It is very likely that this Nike Inc Weekly Options trade will increase in profit before
expiry on Friday.
Join us and see
what we are proposing!
As At Tuesday September 14, 2021.....
Nike Inc (NYSE:NKE) set its all-time
intraday high of $174.38 on August 6 and has since traded lower on
Covid-related issues. The weekly chart for Nike ended last week negative.
The stock is below its five-week modified moving average at $162.60. The stock
is well above its 200-week simple moving average or reversion to the mean at
Yesterday’s news is that the athletic shoemaker lost production of 160
million pairs of shoes in facilities located in Vietnam. The stock is nearing
its quarterly pivot at $157.14, which was tested on July 1 and again on July 19
and July 20. This decline has downgraded its weekly chart to negative.
Shares of Nike are not cheap. Its P/E ratio is 45.95% with a dividend
yield of 0.67%. Nike has beaten earnings-per-share estimates for four
consecutive quarters with their last report released on June 24.
The Original Major
Catalysts for the NIKE INC Weekly
As a result
of worsening supply chain disruption in Vietnam, BTIG has downgraded Nike’s
rating from Buy to Neutral.
“We believe the risk of significant
cancellations beginning this holiday and running through at least next spring
has risen materially for NKE as it is now facing at least two months of
virtually no unit production at its Vietnamese factories which accounted for
51% of footwear and 30% of apparel units,” said BTIG senior analyst Camilo Lyon, in a recent note.
past few months, COVID-19 cases in Vietnam have continued to rise, with its
fully vaccinated rate only between 4% and 5%. In response, Vietnamese
government officials have responded by closing down manufacturing facilities
throughout the country.
if changing manufacturing locations in the interim, Lyon did not mince words
about the dire situation the Swoosh brand could face in the short term.
“Nike is the
best company in the world, it’s also one of the largest. So when we talk about them
shifting their production, we’re talking about a battleship turning, it’s a
very long drawn out process,” he said.
“In particular, on footwear the
complexities mount even more so relative to apparel ... If you think about how
many hands, how many pairs of hands go into making a pair of shoes, it can be
north of 30 people touching one pair of shoes,” he said.
“So the complexity is around labor,
the complexities around the molds and the [cast] and the machinery that have
been in place in Vietnam make that transition, while not impossible, pretty
darn close to impossible, at least in the very near term," he said.
“Based on our supply chain checks
with our manufacturing contacts in Vietnam and Singapore, we estimate F22 sales
could be flat to +LSD vs. current guidance of +LDD growth, with the biggest
impacts to FQ2-FQ4. We now are modeling F22/23 EPS of $3.29 / $4.33,
effectively pushing our earnings estimates out one year,” Lyon's note stated.
are not the only hurdle in Nike’s way when it comes to shifting production
within Asia. China could be seen as a good location if problems continue to
persist in Vietnam. However, Lyon points out that the Trump administration’s
tariffs imposed on Chinese imports are still in effect.
“So then we’re talking about an
incremental cost to that transition from Vietnam to say China of about 30%. So
really there’s not a great amount of quick remedy that we see unfolding. They
can’t shift production out. They can’t keep more units to themselves to sell
through their own channels,” Lyon said.
“In fact, the math that we ran
suggests that that would be a pretty cataclysmic shift against the wholesale
partners in their favor. And it still wouldn’t make up enough of the loss
production,” he added.
“Sales will likely stall or slow
down a bit. It’s too late to change anything for holiday shipping and they
probably figure that things will settle down by next spring,” he said.
A number of other brokerages have
recently commented on NKE......