How to Trade 4 Mall Anchors That Are in a Slump Before the Holiday Season

Dillard’s, Nordstrom and Macy's traded at new 2015 lows on Monday, while J.C. Penney broke below a key level as it enters the holiday season. Here's how to trade them.
By Richard Suttmeier ,

Daily and weekly charts for mall anchorsDillard's (DDS) - Get Report , Nordstrom (JWN) - Get Report and Macy's (M) - Get Report imply that earnings were not up to par during their quarters ended in October. These stocks set 52-week lows on Monday. J.C. Penney (JCP) - Get Report has been a turnaround story, but shares fell below its 200-day simple moving average on Monday.

Macy's reports earnings first, before the opening bell on Wednesday. Analysts expect the retailer to earn 53 cents a share. On Monday, Citigroup lowered its price target and earnings estimates for the stock.

Up next is Dillard's, which reports before the opening bell on Thursday. Analysts expect this retailer to earn $1.21 a share. Some say that Dillard's fiscal 2015 guidance cites significant cost pressures which could hurt the bottom line.

Nordstrom is next, with its earnings report released after the closing bell on Thursday. Analysts expect this retailer to earn 72 cents a share. A key metric for this retailer will be its online e-commerce business.

Finally, before the opening bell on Friday, J.C. Penney reports. Analysts expect the retailer to post a loss of 59 cents a share. TheStreet Ratings gives J.C. Penney a sell rating.

Here's the weekly chart for Macy's.


Courtesy of MetaStock Xenith

Macy's closed at $46.24 on Monday, down 9.9% so far in the fourth quarter and down 29.7% year to date. It is in bear market territory -- 37.2% below the all-time high of $73.61, set on July 17.

The weekly chart for Macy's is negative but oversold, with the stock below its key weekly moving average of $51.98 and its 200-week simple moving average of $50.96. The weekly momentum reading is projected to rise to 9.17 this week, up from 8.34 on Nov. 6. But both readings are well below the oversold threshold of 20.00.

The horizontal lines are the Fibonacci Retracements of the rally from the late-2008 low to the all-time high set on July 17. The stock is below the 38.2% retracement of $47.48, with its 50% retracement of $39.39 and its 23.6% retracement of $57.48.

Investors looking to buy Macy's should place a good till canceled limit order to purchase the stock if it drops to $43.28, which is a key level on technical charts until the end of this week only.

Here's the daily chart for Dillard's.


Courtesy of MetaStock Xenith

Dillard's closed at $87.00 on Monday, down just 0.4% so far in the fourth quarter and down 30.5% year to date. It is in bear market territory, 39.7% below the all-time high of $144.21, set on April 13.

This stock began 2015 under a "golden cross," confirmed on Nov. 29, 2014, when the 50-day simple moving average crossed above the 200-day simple moving average with the stock at $91.50. A "golden cross" indicates that higher prices lie ahead. This signal tracked the stock to its April 13 all-time high.

The stock turned lower following the high, and on May 15 the stock plunged below its 200-day simple moving average, then at $119.84. This break was caused by an earnings miss reported on May 14. As weakness continued, a "death cross" was confirmed on June 30 as the 50-day simple moving average fell below the 200-day simple moving average when the stock closed at $105.19. (A "death cross" suggests prices will sink.)

Recently the stock was trying to bottom, with a trend above its 50-day simple moving average. But that attempt was met with a wave of retailer downgrades, and the stock set a 52-week low of $84.85 on Monday.

Investors looking to buy Dillard's should place a good till canceled limit order to purchase the stock if it drops to $80.96, which is a key levels on technical charts until the end of November.

Here's the weekly chart for Nordstrom.


Courtesy of MetaStock Xenith

Nordstrom closed at $62.70 on Monday, down 6.4% so far in the fourth quarter and down 15.4% year to date. It is in correction territory, 19.3% below the all-time high of $77.65, set on March 23.

The weekly chart for Nordstrom is negative but oversold with the stock below its key weekly moving average of $66.29, but above its 200-week simple moving average of $59.20. The weekly momentum reading is projected to decline to 18.15 down from 20.37 on Nov. 6, below the oversold threshold of 20.00.

The horizontal lines are the Fibonacci Retracements of the rally from the late-2008 low to the all-time high set on March 23. The key level to hold is the 23.6% retracement of $60.84.

Investors looking to buy Nordstrom should place a good till canceled limit order to purchase the stock if it drops to $53.01 and $48.09, which are key levels on technical charts until the end of 2015.

A key level for November is $62.60, a price that aggressive buyers may consider for a first time buy.

Here's the weekly chart for J.C. Penney.


Courtesy of MetaStock Xenith

J.C. Penney closed at $8.53 on Monday, down 8.2% so far in the fourth quarter but up 31.6% year to date. The stock is in correction territory, 15.5% below its 2015 high of $10.09, set on Oct. 5. Keep in mind that the $10 threshold is extremely important, as many equity mutual funds can only invest in stocks that have a long history of trading above $10 a share.

The weekly chart for J.C. Penney is negative, with the stock below its key weekly moving average of $9.07 and its 200-week simple moving average of $14.86. The weekly momentum reading is projected to decline to 67.50 this week, down from 73.42 on Nov. 6.

It appears that the stock needs a catalyst to break out above key levels on technical charts of $8.71 and $9.00, in play until the end the year and the end of November, respectively.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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