Nordstrom Inc. ($JWN) was gaping down about 8 percent Thursday after the close after missing earnings and revenue estimates as well as providing guidance that was below consensus estimates. I generally look to trade this type of intraday news catalyst – missed earnings/revenue and poor guidance – on the short side, assuming I can find a low-risk setup of course. In the case of JWN, however, the stock has just been hammered, as has the retail space in general. One positive thing that I did notice in the report was that the company reportedly gained market share.
The stock was more than 40 percent from its all-time highs and was not making new daily lows Friday morning despite its negative news catalyst. As you can see in my morning notes for Friday below (which I tweeted out before the market open), I had $46.80-$47.10 as potential support.
— Jake Huska (@MarketPicker) Feb. 19 at 09:21 AM
When a stock doesn’t trade down on a negative news catalyst, like Nordstrom had, that’s typically a bullish sign. I think there’s a possibility that the stock has seen a short-term bottom (disclaimer: I’m not predicting anything, and I am currently flat the stock!).
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