Trading Nation

One unlikely retail name is holding up as volatility slams the market

Trading Nation: Bet on brick and mortar?

As volatility has taken Wall Street by storm this week, one unlikely stock has managed to avoid the wreckage: Nordstrom. Shares of the department store are up more than 3 percent this week, outperforming the broader market.

Its best days are ahead of it, according to one market watcher.

Nordstrom "has lagged a little bit, but now it's coming up and it's going up on a technical basis," Matt Maley, equity strategist at Miller Tabak, told CNBC's "Trading Nation" on Tuesday. "It's bumping up against its trend line going back to the 2015 highs [and] also making a symmetrical triangle formation."

The department store chain has suffered a sharp decline in share value since last reaching an all-time intraday high in March 2015.

But, it has steadily risen since hitting a 52-week low last November. Since that point, the stock has surged 27 percent.

Even with those gains, its shares have not caught up to the increases seen elsewhere in retail, Maley said.

"It hasn't rallied anywhere near as much as the other ones," he said. "They seem to be getting ahead of themselves so people might want to think about, at least on a technical basis, swapping out of Macy's and J.C. Penney and into Nordstrom."

Nordstrom is up 1.5 percent this year, a fraction of its competitors. So far this year, Macy's is up 15 percent, Target 7 percent, Kohl's 18 percent, and TJX Companies 6 percent. J.C. Penney is down 6 percent.

Michael Bapis, partner and managing director at the Bapis Group at HighTower Advisors, is more bullish on the retail sector's prospects as a whole.

"They limped through 2017," Bapis said Tuesday on "Trading Nation." "It was a brutal year. There were bankruptcies, there were restructurings, but we believe they're on the path to recovery."

The XRT Retail ETF rose 2.5 percent in 2017, a disappointing result compared with the 's nearly 20 percent rally. Some of the worst performers included Macy's, which plummeted 30 percent, and J.C. Penney which sank 62 percent.

Bapis advises caution in the retail space this year, though.

"It will be on a company-by-company basis, a case-by-case basis, and fundamentals will matter because they are still facing headwinds," he said. "Look at earnings, look at their sales and how are they reinventing themselves with their management."

The XRT ETF was on the rebound Wednesday after following the rest of the market lower during Tuesday's sell-off. The ETF hit a 52-week high on Jan. 24, two sessions before the Dow and S&P 500 last hit closing records.