The results propelled shares through multiple layers of resistance. With bulls back in control, it would be encouraging to see these levels turn to support going forward.
Of course, it helps that the company turned in a better-than-expected quarterly result.
Earnings of 81 cents per share crushed expectations by 16 cents, while revenue of $3.67 billion eked by consensus estimates by $10 million despite declining 2.1% year over year.
While management lowered the upper end of its prior earnings outlook, the midpoint of its current range calling for $3.25 to $3.30 a share edged analysts' estimates of $3.26. Gross margins inched higher in the quarter too, topping consensus estimates.
Was it a perfect quarter? No. But considering some of the results and guidance cuts we've seen in the retail sector this week, such as from Kohl's (KSS) - Get Report and Macy's (M) - Get Report , Nordstrom's report was pretty solid.
As such, Real Money has selected Nordstrom as its Stock of the Day.
Let's look at the charts.
Trading Nordstrom Stock
Even though shares of Nordstrom were rallying off the lows Thursday, investors had a right to be cautious given the type of reactions they were seeing from its peers. Below its 50-day and 200-day moving averages didn't paint a very bullish picture for Nordstrom stock.
In our earnings preview earlier from Thursday, we said:
"The area between $34 and $36 has been notable. Clearing it would give bulls room to run to $38, which has been resistance over the past two months. Above that is the 50% retracement at $38.79. Clearing that area opens the door to a potential run at $42."
For the most part, this setup remains true. JWN stock has hurdled the all-important $35.60 mark. That puts it over the 50-day and 200-day moving averages, the 61.8% retracement and over the gap level from May.
So far, the day's high is $38. Again, anyone who read the preview would not be surprised by this, given that we mapped this area out as resistance.
What's the setup now? For bulls, it's vital that prior resistance turns to support. In other words, below the $35 to $35.60 area signals caution in Nordstrom stock. Above $38.79 -- the 50% retracement -- and this stock has room to rally to $40 or above. Resistance should come into play near $42.
This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.