Under Armor (NYSE: UA) and Dick’s Sporting Goods (NYSE: DKS) are lagging shares of Nike (NYSE: NKE) in the sports apparel sector.



Chart Courtesy of StockCharts.com



We recently noted that Nike shares were rallying on expectations of bullish sales this summer, as the World Cup hits the airwaves. Thus, we thought we'd look at the general status of the sports apparel sector more closely.

And although it's not easy to find publicly traded sports apparel companies, we did find Under Armor and Dick's Sporting Goods as interesting examples of other stocks in the sector. Neither company, though, is showing Nike's strenght at the moment, which suggests that the Nike pop is, at least for now, Nike specific.

Still, Under Armor (NYSE: UA) is pretty good straight play and it doesn’t look as good right now as Nike, although it’s acting better than some stocks in the overall market. Dick’s Sporting Goods (NYSE: DKS), a retailer, is another way to play sports apparel. That one looks a bit better than Under Armor, but not as good as Nike.

From purely a chart analysis point of view, It’s pretty simple, really. Nike is moving higher at a better clip than the other two and the general market, when you compare it to an index like the S & P 500 or the Dow Jones Industrial average. That’s what in technical analysis is known as relative strength. It’s good to own stocks that are showing relative strength.

The bottom line is that Nike is the best of this small sample of stocks and generally, it’s best to own the strongest stock in any group. That usually maximizes your profit potential.

One word of caution, though; Nike has had a big run of late, and chasing it at this point may be dangerous.

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