That was quick. Last week, our technical analysis pointed to a good probability of higher prices in NKE after identifying an ascending triangle on a weekly time frame. Maybe you got stopped out at 79.50. Or, maybe you enjoyed the 10% gain! One of the first questions I got from individuals who saw this analysis and subsequent gain was… Why? What happened? My answer: does it matter? Does the 10% gain not count if we don’t know exactly why. You see, every ounce of our body is programmed to ask this question. It could be curiosity. It could be our rebellious nature. We want to know why. In investing, this desire to know why is looming in the deep recesses of our analytical minds. But guess what? We cannot know everything. Do you want to know why NKE went to $89? Because that is what it’s worth. Price is the final arbiter of value. Why is NKE worth $89? Because enough money believes such that it created demand that outstripped supply to the tune of $89/share. That’s really what happened. Sure, fundamentalists will point to earnings. Ok, that’s fine. But how many times have you seen great earnings and see the price drop? That’s right. It happens a lot. Could it be that price forecast the earnings would be that good? Absolutely. We can think what we think, but we must trade what we see. What did we see? That the likelihood of higher prices in NKE were pretty good. Now what? Move your stops up to $84.50 (which is equal to 50% of this original move).

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Nike Breaking Out

Price matters most.