Long Nike ($NKE), Range Resources ($RRC)

Here’s two names I want to enter long at Monday’s open.

Nike ($NKE)

Nike ($NKE) has been mentioned a couple of times today in the weekend reviews, I’ve seen several well-respected commentators talking about it and I have to agree it’s setting up very nicely for an upside break.

These are the kind of setups I like to see, something in an established uptrend, at or approaching all time highs having entered a period of consolidation, and with volume appearing on the upside as it attempts to break higher.

$NKE has all that in place. It’s almost a little too perfect so don’t be surprised to see it have some kind of fakeout, and pull back one last time to test that $53 area and wash out the weak longs. I’d go so far as to say only a weekly close below $49.65 would invalidate the uptrend for me, but as always it will depend how it gets there, some kind of one-day volatility break or wide-range day would also be a gamechanger.

The prize is not the highs of a few weeks ago, but the blue sky above the all time highs from this time last year. Whenever we get close to significant levels like that I think a stock metaphorically taking a breather before attempting to break out increases the chances of success, and this has all the right ingredients.

Range Resources ($RRC)

I’ve been watching this one all week wanting to get in but realizing I’d probably need to see a new high weekly close before getting the confirmation. As it happens, we got it all: daily, weekly, all time highs. It might appear to be overbought short-term when you eyeball a chart like that, but when you then look at the scale you realize it’s really not that large a move. Add to that the volume you see demonstrating the kind of sponsorship this move is getting.

Finally, you put it all in context with this 3-year line chart of the daily close, and you see it’s just emerged from what was arguably a volatile 18-month range. Given that context this move may have only just begun.