Nike, Inc. (NYSE:NKE) shares are moving sideways on Thursday. They dropped more than 15% yesterday after the company released earnings. There is a chance they have reached an important support level. This is why Nike is the Stock of the Day.

Some old Wall Street adages and sayings aren't just myths. They are based on real market dynamics.

For example, when a stock reaches a price level that had previously been a peak, it tends to encounter resistance. This is because some of the people who purchased shares at the previous peak have been holding onto their losing positions since.

When the stock returns to the buying price, and they can get out at breakeven, they sell. If there are enough of these orders, it creates resistance at the former peak.

This is where the expression ‘sell at former peaks' comes from.

Another saying, based on a real dynamic, is ‘gaps tend to refill.' This refers to how, if a stock ‘gaps' or moves quickly through price levels, then consolidates, reverses, and returns to those levels in the opposite direction, it can move back through them quickly.

This happens because if a stock moves through levels quickly, it doesn't spend enough time at them for there to develop a large amount of vested interest. This means there will be a small number of buyers or sellers at these levels.

The lack of liquidity can result in a rapid move.

‘Markets have memories' is also an expression based on a real dynamic. It refers to how an important price level can retain its importance for a long period of time.

It could be months or even years. This may be the case with Nike.

As you can see on the chart, the $44.25 level was support for the shares from August 2015 through October 2017. If the market ‘remembers' this, the shares will find support once again. They may even reverse and rally.

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