Category Archives: JWN

Nordstrom (JWN), a major luxury retailer, has been struggling this year. The stock has fallen -27% and we would like to explore a technical pattern call the Golden Cross to see how well the indicator holds up with Nordstrom.

Here’s a general overview of the Golden Cross as defined by Investopedia.

The golden cross is a candlestick pattern that is a bullish signal in which a relatively short-term moving average crosses above a long-term moving average. The golden cross is a bullish breakout pattern formed from a crossover involving a security's short-term moving average breaking above its long-term moving average or resistance level.

In our observation, we’ve chosen to use the 50 day moving average as the short-term period and the 200 day moving average as the long-term period of review. Based on our data going back to 1982, this strategy has produced positive returns approximately 65% of the time, assuming we sell the stock within 253 trading days (or approximately 1 year) after the signal is triggered. The table below provides the details. Continue reading →