Hey Traders,
Bill Griffo in the Pit Report today.
Nordstrom Inc. (Ticker: JWN) is the stock pick this week …
JWM is a top retailer in the competitive US market.
They have built a loyal customer base, giving them the advantage of pricing power over competition.
They have also built a significant presence in the e-commerce space with 38% of sales coming online.
The economy has been tough on retail, but with the Fed tightening cycle coming to an end shoppers may be filling stores in the near future …
Today, I will show you why I think the stock is a buy and a trade to consider …
Calling All Shoppers …
Nordstrom is heavily discounted for the spring season … get it while it’s hot!
The chart below shows JWN ready to complete a positive price/relative strength (RSI) divergence.
If the stock makes a new low while RSI closes with a higher low, you’d want to buy: the reversal pattern triggered is very reliable.
A 5-Star Discount
Morningstar gives JWN a 5-star valuation with a $40 dollar fair value price.
Its price-to-sales is at a historic low at $.18 with a return on equity of 37% and $473 million free cash flow.
‘Tis The Season To Be Long JWN
Check out the bullish seasonal pattern for JWN:
Now is the time to buy JWN and ride one of the most powerful seasonal periods of the year for the stock.
What’s The Trade?
Purchase an April 28 16.5/19 call spread for $1.15 …
This is an ideal trade to capture the seasonal tailwind over the next few weeks.
You’ll also likely catch the Fed signaling a pause from hiking interest rates. Then, JWN will be off the races.
Like real estate trading is all about location, location, location …
If you buy JWN here and you’re wrong, you can stop yourself on a close at new lows and limit your loss. Low risk/high reward trades will build generational wealth.
Until next time …
Live and Trade With Passion My Friend,
Griff