Nordstrom, Inc (JWN) is a specialty retailer with 225 stores across the U.S. The company’s stock is currently trading around $77.80 in a 52 week range of $45.82-$79.12. The stock has been performing well this year adding nearly 18% to share prices year to date. JWN is set to report their most recent quarterly earnings today after the market close. JWN has been a weak performer on earnings day over the past 8 quarters. The stock has sold of 6 times rallied 1 time and finished the day unchanged one other time. Despite this weak historical performance the stock is trading just off of its 52 week highs into the release. This Ichimoku Cloud is also indicating further upside in JWN. Shares of JWN competitor Macy’s Inc. (M) rallied this morning on earnings after reporting earnings of $0.47 per share against consensus estimates of $0.38. This should bode well for JWN earnings as they operate in a very similar market space. So despite the weak historical performance in JWN we believe that the chart is strong enough and the sector is strong enough to rationalize a long ahead of earnings. JWN moves 1.9% on earnings day on average. The options market is currently implying a move of $1.45 by tomorrows expiration giving us an upside target around $64.53. Using this target we will set up a trade.
Trade: Buying the JWN Nov 62.5-65 Call Spread for $1.00
Risk $100 per 1 lot
Reward: $150 per 1 lot
Breakeven: $63.50
