Premium Earnings 11-14-13

• Posted by Greg Harmon
• on November 14th, 2013

{+++} One name today one that reports after the close Thursday, Nordstrom, $JWN.

Nordstrom, $JWN

Nordstrom, $JWN, completed a ‘W’ pattern, also a Cup and Handle, and is moving higher. It gapped and ran through the previous high on the back of a good report from Macy’s towards the target of 65.60 on the Cup and handle. It has a Relative Strength Index (RSI) in bullish territory and technically overbought with the Moving Average Convergence Divergence (MACD) indicator rising. The bias is higher but in the short run there is a possibility of consolidation or a pullback as it has moved a long way quickly. There is no resistance higher and support comes lower at 62 and 61.20 followed by 60.50 and 60 before 58.30 and 55.50. The reaction to the last 6 earnings reports has been a move of about 2.40% on average or $1.52 making for an expected range of 61.80 to 65. The at-the money November Straddles suggest a larger $2.60 move by Expiry with Implied Volatility at 80% above the December at 25%. Short interest is low at 5%. There were large sellers of January and December 60 Puts yesterday and Open Interest looks to favor the 62.5 Strike for a possible pin Friday.

Trade Idea 1: Buy the November 65 Calls for $0.59.

Trade Idea 2: Buy the November 62.5/65 Call Spread for $1.28.

Trade Idea 3: Buy the November/December 65 Call Calendars for a $0.65 credit.

Trade Idea 4: Buy the December 65 Call for $1.15.

Trade Idea 5: Buy the November 62.5 Put for $0.86.

Trade Idea 6: Buy the November 62.5/60 Put Spread for $0.60.

Trade Idea 7: Buy the December 62.5/60 1×2 Put Spread for $0.06.

I like #4 or #3 best for the upside longer term, and #7 to capture any pullback.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

blog comments powered by Disqus