Shorting Nike for a Trade

$NKE

I put on a swing short trade in NKE 0.00%↑ today. Presented below is a 39 minute chart (I like to use 39min as it divides the day into 10 equal bars).

Nike’s been in a gap and go move up since its October earnings release. It printed a strong candle Monday, and I dropped an AVWAP on that. I also dropped an AVWAP from the earnings release date.

Well Nike broke Mondays AVWAP today, and while its currently holding it heading into the close, there’s negative RSI divergence on the chart. Taken together with what’s been a bit of shaky week in the markets (breadth, VIX elevating), I’m playing for a downside move to retest the earnings AVWAP.

If the stock breaks to the upside Monday I’ll be out quickly, but I’ll be hoping for the opposite. This just seems like a market that looks prepared to take wins, and I’m hoping to capitalize on that selling.