Nike Inc. (NYSE:NKE) stock fell on Tuesday morning following reports that the athletic footwear giant plans to eliminate 775 positions at U.S. distribution facilities as part of its ongoing automation initiative.
The layoffs, announced by Nike, come on top of the 1,000 corporate job cuts disclosed last summer, according to a CNBC report on Monday. The majority of the affected positions are at distribution center locations in Tennessee and Mississippi, where Nike operates major warehouses.
The decision reflects a broader restructuring trend across the retail sector. Macy’s Inc. (NYSE:M) recently announced the closure of several Connecticut facilities, resulting in over 1,000 layoffs as the department store chain works to streamline operations.
The workforce reduction occurs as CEO Elliott Hill attempts to revitalize Nike following a period of weak sales and declining margins. Hill previously cautioned that the “journey back to greatness” would not be linear.
Technical Analysis
The technical picture for Nike shows that the stock is currently trading 1.2% below its 20-day simple moving average (SMA) and 4.6% below its 100-day SMA, reflecting a bearish short-term trend. Over the past 12 months, shares have decreased by 16.04%, and they are currently positioned closer to their 52-week lows than highs, which raises concerns about the stock’s longer-term viability.
The RSI is at 53.20, indicating neutral momentum, while the MACD is above its signal line, suggesting a bullish signal. However, the combination of neutral RSI and bullish MACD suggests mixed momentum, indicating that traders should proceed with caution.
- Key Resistance: $66.50
- Key Support: $63.00
With the stock testing the $63.00 support level, a break below this could signal further declines, while a bounce could indicate a potential recovery. Overall, Nike’s current technical setup reflects a challenging environment, and traders should watch for key levels to guide their decisions.
NKE Price Action: Nike shares were down 2.05% at $63.66 at the time of publication on Tuesday, according to Benzinga Pro data.
Photo: slvn_an / Shutterstock
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