Is it Time to Buy Nordstrom

• Posted by Greg Harmon
• on October 6th, 2016

Ok, so maybe that was not an appropriate question for Urban Meyer at his press conference. He has bigger things on his mind as the Big 10 Schedule starts to ramp up. But that does not mean it is not a good question to ask. After all the stock has fallen a lot.

Readers of my work will already know that just because a stock has fallen a lot is not a good reason to buy it. I like to buy stocks that are already moving higher. Nordstrom peaked in early 2015 and then started to move lower in September. It continued down for the next 9 months. But after finding a bottom in May and consolidating it did start to move back higher. The chart below shows that move up stalled as it reached the high of the April bounce.

That move did take the stock over its 200 day SMA, a bullish sign. It had not been over that since it started falling. The consolidation since 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 some for clients today.

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