Nike Inc. (NYSE: NKE) opened at $53.80. So far today the stock has hit a low of $53.80 and a high of $54.22. As of 10:45, NKE is trading at $54.07, up $0.32 (0.6%).The stock has traded within a tight range over the past three months, with some resistance near $55. NKE's one-year high came in April at $55.10. Eight million shares of NKE belong to the portfolio of Warren Buffett, who is known for his highly successful investment style. Buffett's signature buy-and-hold method singles out stocks that he expects will rise solidly over time. NKE has done just that, gaining 43% over the past nine months. Recent technical indicators for NKE have been bearish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
For a bullish hedged play on this stock, I would consider an October bull-put credit spread below the $47.50 range. NKE hasn't been below $47.50 since November and has shown support around $52.50 recently. This trade could be risky if NKE stock has formed a top just below $55 and pulls back some, but even if that happens, this position could be protected by the strong historical support around $48 combined with the stock's 200-day moving average, which is at $47.60 and rising.
Brent Archer is an options analyst and writer at Investors Observer. Do you have any deadwood in your portfolio? Check out the 18 Warning Signs That Tell You When To Dump A Stock. DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls a position in NKE.
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