{"id":50981,"date":"2019-12-22T12:08:42","date_gmt":"2019-12-22T20:08:42","guid":{"rendered":"https:\/\/drduru.com\/onetwentytwo\/?p=50981"},"modified":"2019-12-22T23:33:46","modified_gmt":"2019-12-23T07:33:46","slug":"the-power-of-100-nike-carmax-starbucks","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2019\/12\/22\/the-power-of-100-nike-carmax-starbucks\/","title":{"rendered":"The Power of 100: Nike, Carmax, and Starbucks"},"content":{"rendered":"\n<p>I believe there is an old Wall Street adage that describes the inevitability of a stock hitting $100 once it gets &#8220;close enough&#8221; to that price level. One hundred is a nice round number, and it looks like a major (psychological) milestone. So when both Nike (NKE) and Carmax (KMX) suffered post-earnings pullbacks from around $100 all-time highs, I got interested from a technical point of view. Of course, when <a href=\"https:\/\/drduru.com\/onetwentytwo\/2019\/12\/22\/t2108-update-191220\/\">the stock market is trending higher and hitting all-time highs<\/a> every week, individual stocks will inevitably hit all sorts of magic numbers.<\/p>\n\n\n\n<p>Still, I remember Starbucks (SBUX) topping out right under $100 after a post-earnings surge in July. So at least for SBUX, the $100 price point became a major pivot point.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"550\" height=\"375\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2019\/12\/191220_SBUX.png\" alt=\"Starbucks (SBUX) topped out at $99.11 and is still in recovery mode with a bullish breakout from 50DMA resistance after bouncing off 200DMA support.\" class=\"wp-image-50993\"\/><figcaption>Starbucks (SBUX) topped out at $99.11 and is still in recovery mode with a bullish breakout from 50DMA resistance after bouncing off 200DMA support.<\/figcaption><\/figure><\/div>\n\n\n\n<p>The S&amp;P 500 (SPY) was hitting all time highs at the time SBUX soared toward $100, so it was easy at the time to believe that the momentum would continue for SBUX. The first warning came the very next day when SBUX gapped down. The second warning was a post-earnings closing low in another two days. The final warning was a September breakdown below support at the 50-day moving average (DMA). These warnings that $100 marked a final target for traders and investors provide a potential template for trading around Nike (NKE) and Carmax (KMX).<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Nike<\/strong> (NKE)<\/h3>\n\n\n\n<p>Nike (NKE) lost 1.2% after reporting earnings the prior evening. While I have been (short-term) bullish on NKE <a href=\"https:\/\/drduru.com\/onetwentytwo\/2019\/11\/14\/nike-kicks-amazon-com-into-bearish-territory\/\">since mid-November<\/a>, I will flip bearish if NKE closes at a fresh post-earnings low. NKE stays bullish on a close above $101.50, the post-earnings intraday high. On the bullish side, I prefer to trade NKE with calendar call spreads combined with a longer-dated call spread.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"550\" height=\"375\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2019\/12\/191220_NKE.png\" alt=\"Nike (NKE) lost 1.2% on a slight post-earnings pullback.\" class=\"wp-image-50976\"\/><figcaption>Nike (NKE) lost 1.2% on a slight post-earnings pullback.<\/figcaption><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Carmax<\/strong> (KMX)<\/h3>\n\n\n\n<p>Carmax (KMX) is in a clear bearish position. The stock lost 6.2% on a post-earnings gap down and a 2-month low. The loss left behind a November\/December double-top. The stock is over-stretched to the downside with the close below its lower Bollinger Band (BB), so I would wait for some kind of rebound before shorting and\/or buying puts. The stop-loss is at a close above the 50DMA. It will take an invalidation of the double-top to return KMX to a bullish position. I also could consider going long after a test of 200DMA support.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"550\" height=\"375\" src=\"https:\/\/drduru.com\/onetwentytwo\/wp-content\/uploads\/2019\/12\/191220_KMX.png\" alt=\"Carmax (KMX) lost 6.2% and gapped down below its 50DMA.\" class=\"wp-image-50977\"\/><figcaption>Carmax (KMX) lost 6.2% and gapped down below its 50DMA.<br><strong>Source of charts: FreeStockCharts<\/strong><\/figcaption><\/figure><\/div>\n\n\n\n<p>Be careful out there!<\/p>\n\n\n\n<p>Full disclosure: long SBUX call options<\/p>\n","protected":false},"excerpt":{"rendered":"<p>I believe there is an old Wall Street adage that describes the inevitability of a stock hitting $100 once it gets &#8220;close enough&#8221; to that price level. One hundred is a nice round number, and it looks like a major (psychological) milestone. So when both Nike (NKE) and Carmax (KMX) suffered post-earnings pullbacks from around &#8230; <a title=\"The Power of 100: Nike, Carmax, and Starbucks\" class=\"read-more\" href=\"https:\/\/drduru.com\/onetwentytwo\/2019\/12\/22\/the-power-of-100-nike-carmax-starbucks\/\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[368,483,482,1129,338,511,62,1304],"tags":[2293,1855,1012,1013,486,485],"class_list":["post-50981","post","type-post","status-publish","format-standard","hentry","category-automotive","category-breakdown","category-breakout","category-food-retail","category-retail","category-support","category-technical-analysis","category-top","tag-carmax","tag-kmx","tag-nike","tag-nke","tag-sbux","tag-starbucks"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Power of 100: Nike, Carmax, and Starbucks - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2019\/12\/22\/the-power-of-100-nike-carmax-starbucks\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Power of 100: Nike, Carmax, and Starbucks - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"I believe there is an old Wall Street adage that describes the inevitability of a stock hitting $100 once it gets &#8220;close enough&#8221; to that price level. One hundred is a nice round number, and it looks like a major (psychological) milestone. So when both Nike (NKE) and Carmax (KMX) suffered post-earnings pullbacks from around ... 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