American Eagle Outfitters, Inc. is a specialty retailer of men%s and women%s casual lifestyle apparel, footwear, and accessories. As of 12/00, the Company operated 556 mall-based stores in 47 states. For the 9 months ended 10/28/00, revenues increased 23% to $669.7M. Net income decreased 17% to $44.6M. Revenues reflect increases in comparable and non-comparable store sales. Earnings were offset by higher S/G/A costs.

January 30, 2001

After achieving a new 52-week high on Monday, American Eagle Outfitters is being added to our Current Play list. AEOS is a specialty retailer of all-American casual apparel, accessories and footwear for men and women. AEOS will split its stock 3-for-2 on February 23rd. AEOS has split its stock three times since 1998, the most recent split occurred in May of 1999, a 2:1. On Monday, the stock exploded to a new high of $58.38 on monster volume of 5.6 million shares. The company normally trades on an average of 1.2 million shares, based on a cumulative three-month average. Again on Tuesday, volume soared, this time coming in at 2.8 million shares. This confirmation led us to open a new play on AEOS. We see the potential for further gains in the immediate future. As of the close of trading on Tuesday, AEOS shows technical support at the 5-dma at $52.10 and then at the half century mark. Resistance will be Monday's new high at $58.38. Look for a new high achieved on volume over 1.5 million by midday as a possible entry point for a new play. A bounce off the 5-dma on rising volume also might trigger an entry point. Look for adjoining support in the NASDAQ Composite Index (COMPX) and the CBOE Retail Index (RLX.X) for additional play support. We will post a tight stop loss at $51.50 to protect ourselves from profit taking over the next couple of days.

Picked on January 30th at $55.81
Change since picked 0.00
Stop Loss at $51.50

February 1, 2001

American Eagle booked a new 52-week high on Wednesday but gave back a couple points on Thursday. We began coverage of AEOS on Tuesday after the stock exhibited some impressive performance on Monday. The company is a specialty retailer of all-American casual apparel, accessories and footwear for men and women between the ages of 16 and 34. On Thursday, the stock slipped throughout the day. As of the close, AEOS now has support at the 5-dma at $55.65 and the 10-dma at $51.51. The stock has made four successive attempts to conquer $58.00 this week but has been unsuccessful; therefore, the resistance level to beat will be $58.00. The daily volume has been dropping, so keep an eye on that when considering opening a new play. The average trading volume is 1.3 million shares but we'd like to see more of Monday's type volume (5.4 million) to accompany the stock through resistance. Possible entry points for a new play might be a bounce off the 5-dma on volume over 2 million shares by midday. We will keep our stop at $51.50 on this play.

Picked on January 30th @ $55.81
Change since picked +0.07
Stop Loss at $51.50