As temperatures soar in the Northern Hemisphere, although nowhere as much as the AI Infrastructure names, its time to bring on the running shoes - and what better way to fund these than invest in some of direct beneficiaries!
Once high-flying names, the sports apparel and footwear segment has seen a dramatic pullback across the board - from Nike (NKE; down 75% from peak) to On Holdings (ONON; down 40% from peak), to Deckers (DECK; down 50% from peak). While the decline in share prices is attributable to a combination of both structural (NKE) and cyclical factors (ONON, DECK), they have also borne the brunt of margin erosion resulting from higher costs in a post-liberation day tariff world.
That was then, the question for investors is, whether this changing? Are the fundamental problems priced in? A cyclical revival and a potential contrarian bet on NKE are pre-requisites to investing. While narratives will follow, its price that leads the narratives - AND, Price is beginning to show signs of life across all three companies. Whether this is a tactical opportunity or the start of a long-awaited revival, time will tell - but for now, all three stocks are catching a bid and at the minimum, an opportunity to be long with tight stops. Within the space, ONON appears to best placed.
- ONON ($39.4) - Momentum and trend strength - both absolute and relative to SPY. Trading opportunity with $34 stop loss.
- NKE ($45.9) - Bouncing of $42 lows in early stages of trend reversal, backed by momentum strength (absolute and relative). Trading Opportunity with $41.5 stop loss; Above $47, add to positions.
- DECK ($114.2) - Momentum and trend strength - both absolute and relative to SPY. Resistance in $122-125 area - add to positions above resistance zone. Stops at $100.
NKE + ONON + DECK - Relative to SPY - Turning Around
source: Trading View
ON Holdings - Reversing Up!
source: Trading View
Nike - Basing - Is the Worst Over?
source: Trading View
Deckers - Time to Hoka?
source: Trading View
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