Stock Of The Day: Did Nike Refill The Gap?

Benzinga·01/02/2026 18:29:52

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NIKE, Inc. (NYSE:NKE) shares are consolidating on Friday. They have been strong after significant insider buying was made public.

• How are NKE shares performing?

The shares are refilling a gap. This is why Nike is the Stock of the Day.

One of the main reasons why resistance forms in financial markets is investor and trader psychology. It is because of buyers' remorse.

Sometimes, people regret buying shares of a stock if the price drops afterward. Many of them come to think that their decision to buy was a mistake and vow to sell.

But they also decide that they will only do so if and when they can exit their losing positions at breakeven. As a result, if the stock returns to its buy price, they place sell orders. If there are enough of these orders, it will create resistance.

This is why there can be resistance at former peaks. Some of the people who bought at the peak regret doing so when the price drops. If the stock eventually returns to the former peak, they place sell orders. If there are enough of them, it will create resistance at the level again.

The same dynamic can occur when a stock breaks support.

Some of the people who bought shares at the support regret doing so when the price falls below what they paid for their shares. When the stock returns to what has been support, if there is a large group of remorseful buyers selling, it can actually convert what had been a support level into a resistance level.

As you can see on the chart, Nike gapped down from around $65.50 to around $59.20. This means it closed at the higher price, and the next day it opened at the lower price.

There was no trading between these levels, and if there was no trading, there was no one who bought shares that would be trying to sell on the way back up. Because of the lack of sell orders between these prices, buyers are forced to pay premiums and outbid each other.

This can force the shares rapidly higher. This is what has occurred with Nike, and if the gap continues to refill, it will continue to rally.

Photo: slvn_an via Shutterstock