Bull Signal Flashing for JWN Amid Analyst Upgrade

Most analysts are still bearish on the retail concern

Deputy Editor
Jan 6, 2020 at 2:46 PM
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Retail name Nordstrom, Inc. (NYSE:JWN) is getting a boost today, after J.P. Morgan Securities hiked its rating to "neutral" from "underweight," and lifted its price target to $41 from $26 -- falling right in line with JWN's current levels. The analyst cited positive structural changes within the company, adding that any growing pains it may be experiencing are on their way out. Nordstrom could get another boost, too, based on data from Schaeffer's Senior Quantitative Analyst Rocky White.

To elaborate, JWN just pulled back to its 40-day moving average after a lengthy period above the trendline. Per White's modeling, the security has staged eight similar pullbacks in the past three years, and was higher one month later during six of these times, averaging a 3.64% gain. From its current perch at $40.85 similar move would put the security at $42.42 -- a region it hasn't touched since late-April. 

Daily Stock Chart JWN

Another trendline that's acted as support in recent months is Nordstrom's 30-day moving average, which has guided JWN roughly 64% higher since its nearly 20-year low at $25 back on August 15. 

On the analyst front, there's still plenty of room for upgrades to propel JWN higher. Prior to today, only one member of the brokerage bunch called the stock a "strong buy," while 12 said "hold" or worse. On the other hand, bullish bets at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have been ramping up, as evidenced by Nordstrom's 10-day call/put volume ratio of 2.74, which sits higher than 88% of all other readings from the past year. 

Those looking to get in on JWN's next move with options will have to do so at a premium. The stock's Schaeffer's Volatility Index (SVI) of 49% sits in the 44th percentile of its annual range, meaning options traders are pricing in relatively high volatility expectations. 

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