Retailer Nordstrom (JWN) was trading lower after it slashed its full-year profit forecast following a weaker-than-expected holiday sales update. Let's check out the charts and indicators to see when is a good time to go shopping.
In this daily bar chart of JWN, below, I can see a clear pattern of lower highs and lower lows (the simple definition of a downtrend) from April. Weakness on the chart is not new. Prices recently failed at the underside of the declining 50-day moving average line. The slope of the 200-day moving average line is also negative.
The On-Balance-Volume (OBV) line shows me that sellers of JWN have been more aggressive than buyers since August. The trend-following Moving Average Convergence Divergence (MACD) oscillator is below the zero line and narrowing.
In this weekly Japanese candlestick chart of JWN, below, I can see that a downward trend has been in force the past two years. Prices trade below the negatively sloped 40-week moving average line.
The weekly OBV line shows weakness the past two years. I fail to see a bottom reversal pattern from the candles. The MACD oscillator has been bearish for more than a year now.
In this first Point and Figure chart of JWN, below, I used daily price data and here the software suggests $10 as a downside price target.
In this second Point and Figure chart of JWN, below, I used weekly data. Here the X's and O's give us the same $10 price objective.
Bottom line strategy: Everyone likes to go shopping when there is a sale. The share price of JWN has been on sale for a while now but lower prices are being suggested by the Point and Figure charts. Avoid the long side of JWN for now. Watch for coupons!
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