On Friday, Nordstrom reached an important technical benchmark, with its Relative Strength (RS) Rating moving into the 80-plus percentile with an upgrade to 81, up from 75 the day before.
IBD's proprietary rating identifies market leadership with a 1 (worst) to 99 (best) score. The score shows how a stock's price performance over the last 52 weeks compares to all the other stocks in our database.
Over 100 years of market history shows that the stocks that go on to make the biggest gains typically have an 80 or better RS Rating as they launch their biggest runs.
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Nordstrom broke out earlier, but has fallen back below the prior 24.93 entry from a flat base. In the scenario where a stock breaks out then falls 7% or more below the entry price, it's considered a failed breakout. If that happens, it's best to wait for a new pattern to form. Also understand that the latest consolidation is a later-stage base, which makes it riskier to establish a new position or add shares to an existing one.
Top and bottom line growth moved higher last quarter. Earnings were up 32%, compared to 14% in the prior report. Revenue increased from 3% to 5%.
The company earns the No. 1 rank among its peers in the Retail-Department Stores industry group. Dillard's and Macy's are also among the group's highest-rated stocks.
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