Where Do Nordstrom, Inc., Advance Auto Parts, Inc. Go After Earnings Breakouts?

A closer look at JWN and AAP after each retail stock soared on earnings

Dec 1, 2016 at 3:06 PM
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With the holiday season getting underway, retail stocks are in focus. Adding to the seasonal sector buzz, several retail stocks recently broke out on upbeat earnings reports. Among them are department store Nordstrom, Inc. (NYSE:JWN) and car component dealer Advance Auto Parts, Inc. (NYSE:AAP), both of which we'll examine more closely below.

JWN caught fire after a strong earnings report early last month, jumping 4.8% in the ensuing session -- en route to an annual high of $62.82 on Nov. 14. Last seen at $56.03, the retail stock is currently finding a foothold around the $55 area, which previously served as resistance. The shares could soon run to the round $60 level, which may present a short-term hurdle after rejecting JWN in March.

Daily Chart of JWN Since June 2016
With 50- and 200-Day Moving Averages

jwn daily dec 1
Chart courtesy of StockCharts.com

Fellow retailer AAP is struggling in the $170 area after a big post-earnings rally in mid-November, currently trading at $170.42. The round level served as resistance in August, and overhead calls could further limit the stock's upside potential in the near term. Furthermore, AAP's 14-day Relative Strength Index (RSI) of 72 rests in overbought territory, so a short-term breather may have been in the cards.

Daily Chart of AAP Since June 2016
With 50- and 200-Day Moving Averages
aap daily dec 1
Chart courtesy of StockCharts.com

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