It May Be Time To Buy Nordstrom

Published 10/06/2016, 01:30 PM
Updated 05/14/2017, 06:45 AM
JWN
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Readers know that just because a stock has tanked, doesn't mean it's time to jump in and buy. I like stocks that are already moving higher. Nordstrom (NYSE:JWN) peaked in early 2015, then started lower in September. It continued down for the next 9 months, but after finding a bottom in May and consolidating, it started back higher. The chart below shows that the move up stalled as it reached the high of the April bounce.

Nordstrom

That move took the stock over its 200-day SMA -- a bullish sign. Note that it had not been over that point since it started falling. The consolidation since then has held over the 200-day SMA, with a minor pullback and retracement. The price action since April can be viewed as an Inverse Head-and-Shoulders pattern. A break of the neckline, at about 53.10, gives a price objective to at least 71. The momentum indicators are bullish with the RSI in the bullish zone and rising while the MACD is crossing up. Finally, the Bollinger Bands® are opening to the upside to allow a move up.

So the short answer is, "maybe it is time to buy Nordstrom".

I bought it for clients on Thursday.

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