4 Retail Stocks That Could Rally Into Black Friday

Retail stocks Nordstrom, Inc. (NYSE:JWN), Coach Inc (NYSE:COH), Tiffany & Co. (NYSE:TIF), as well as the SPDR S&P Retail ETF (XRT), could outperform this Thanksgiving week

Nov 21, 2016 at 2:47 PM
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Thanksgiving week has historically been bullish for the S&P 500 Index (SPX) over the past 50 years, as Schaeffer's Senior Quantitative Analyst Rocky White recently pointed out. Further, a trio of high-end retailers emerged as the best stocks to own this week, if recent history is any guide: department store Nordstrom, Inc. (NYSE:JWN), accessories maker Coach Inc (NYSE:COH), and jeweler Tiffany & Co. (NYSE:TIF). Against this backdrop -- and with Black Friday, the biggest U.S. shopping day of the year, on deck -- we decided to take a closer look at the aforementioned retailers, as well as how the broader SPDR S&P Retail ETF (XRT) tends to perform this holiday-shortened week.

Best thanksgiving

JWN has been the top Thanksgiving-week performer, with 90% ending in the black, going back 10 years. The stock boasts an average gain of 6.52%, the best of all SPX stocks. On the charts, JWN has dropped 1.8% so far today, and now sits at $57.62. However, perhaps Nordstrom, Inc. shares need a breather after their recent post-earnings ascent, which culminated in an annual high of $62.82 on Nov. 14. Now, JWN is attempting to establish a foothold atop the $56-$58 area, which has capped several rally attempts over the past year.

JWN Nov 21

COH has been runner-up, ending nine of the past 10 Thanksgiving weeks higher, with an average gain of 5.28%. The stock was last seen hovering around breakeven at $38.01, and attempting to face off with a familiar area on the charts. Specifically, Coach Inc shares are trying to navigate their way north of the $38-$39 area, which acted as a foothold for most of 2016.

COH Nov 21

TIF takes the proverbial bronze when it comes to Thanksgiving week, ending higher 90% of the time, for an average gain of 3.14%. After putting in a double-bottom in the $60 neighborhood over the summer, Tiffany & Co. shares rallied to an annual high of $81.89, tagged Nov. 11. Since then, the stock has taken a respite, but could find support in the $75 area -- a region that acted as a roadblock for most of the past year. At last check, TIF is up 0.3% at $76.57.

TIF Nov 21

Finally, as you may have guessed, the XRT tends to fare rather well during the week of Black Friday. The exchange-traded fund (ETF) has ended the week higher in each of the past four years, and seven of the past 10 years. In fact, XRT averages a gain of 2.32% during Thanksgiving week -- more than 10 times its anytime average weekly gain of 0.22%, going back to 2006. (Still, XRT isn't even the best-performing ETF this week, historically...)

Digging even deeper, Monday and Wednesday tend to be the best days for XRT this week, with the retail ETF ending higher 70% of the time, and logging average returns that handily exceed anytime Monday and Wednesday performances. In fact, XRT averages a Monday loss of 0.05% over the past 10 years, compared to a Thanksgiving-week Monday gain of 1.09%.

XRT Thanksgiving Nov 21

The SPDR S&P Retail ETF (XRT) is looking to extend its streak, up 0.5% at $45.53. So far in November, the XRT has added nearly 6%, and is on pace to topple its 10-month and 20-month moving averages for the first time since July 2015, when the ETF was bumping up against record highs.

XRT chart Nov 21

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