Struggling Retail Stock Flashing Bear Signal

Nordstrom adopted a "poison pill" last month

Digital Content Manager
Oct 19, 2022 at 1:53 PM
facebook X logo linkedin


There's been plenty of buzz about department store retailer Nordstrom, Inc. (NYSE:JWN) lately. Earlier this week, the company announced its Chief Financial Officer (CFO) role would exchange hands by year end, and just last month, the company adopted a "poison pill," after Mexico-based peer bought a 9.9% passive stake in the company. This so-called "poison pill" will prevent investors from amassing more than 10% of Nordstrom's shares. The equity has seen its fair share of choppy trading amid all this, with several attempts to close up a late-August bear gap met with resistance at the $20 mark. Another layer of resistance has emerged at the security's 70-day moving average, too, which could spell out even more trouble for JWN in the coming month. 

A study from Schaeffer's Senior Quantitative Analyst Rocky White shows Nordstrom stock coming back within on standard deviation of this trendline after a lengthy period below here. According to this study, there have been seven similar instances in the past three years. The equity dropped lower one month later 71% of the time, averaging a drop of 8.2%. A similar move from its current perch at $19.16 would put at $17.58, which coincidentally marks the level the security bounced from late last week.

jwn oct 19

Analysts are hesitant on JWN, with just three of the 14 in coverage calling it a "strong buy." Meanwhile, short sellers are starting to hit the exits, off 7.3% in the last two reporting periods, though these bears are still firmly in control. Short interest makes up 23.6% of the stock's available float, or over three days' worth of pent-up buying power. 

With all his said, now might be a good time to speculate on JWN's next move with options. The security's Schaeffer's Volatility Index (SVI) of 67% stands higher than just 26% of annual readings. In other words, options players are pricing in relatively low volatility expectations at the moment. 

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI