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 8, 2001

Shares of American Eagle Outfitters tumbled on Thursday just one day after the stock reached a new 52-week high. On Wednesday, AEOS achieved a new high of $59.88 only to give back 7% of that on Thursday. After the close of trading on Wednesday, the clothing retailer announced sales in the January period increased 5.9% compared to the corresponding five-week period last year. AEOS also posted record total sales for the month of $72.3 million. On Thursday, this good news was greeted with profit taking by investors and the stock lost ground all day. The volume of trading on Thursday topped 2 million shares, quite a bit above its three-month average of 1.4 million. The company is scheduled to split its stock 3:2 on February 23rd. The stock closed just above support at the 20-dma at $52.03 today. Resistance will likely be encountered at the 10-dma at $55.77 and at $58.00. Consider opening a new position if AEOS bounces off support or moves through resistance on strong volume, meaning 750,000 shares by midday. Watch for market support in the NASDAQ Composite Index (COMPX) and the CBOE Retail Index (RLX) when considering starting a new play. We will post our stop just below support at $51.50.

Picked on January 30th @ $55.81
Change since picked -2.18
Stop Loss at $51.50

February 6, 2001

American Eagle Outfitters has begun the week on a positive note. The company that is a specialty retailer of all-American casual apparel, accessories and footwear for men and women has already posted a 4% gain. Reuters carried a story last week lauding the retailer's stock advance in the face of an existing sluggish retail market. The company will be splitting its stock 3:2 later this month on the 23rd, ahead of that date we are looking for a split run to ensue. The most immediate challenge for AEOS will be overhead resistance now at $58.00. In order for that level to be conquered, we'd look for trading volume to exceed 1 million shares by midday. AEOS normally trades an volume of 1.3 million shares based on a three-month average. Aside from the split, the company is also scheduled to report earnings on March 1st, which might also help the stock to head higher over the next two weeks. Should the stock pullback, however, look for support at the 5-dma at $56.27 and the 10-dma at $54.18. Traders considering a new play on AEOS should consider a bounce off a support level on good volume by midday day. We will keep our stop at $51.50 on this play.

Picked on January 30th at $55.81
Change since picked +1.32
Stop Loss at $51.50

February 4, 2001

American Eagle Outfitters finished the week up 9 percent despite a down day on Friday. The company that is best known for being a specialty retailer of men's and women's casual lifestyle apparel, footwear, and accessories was not able to pierce the resistance level of $58.00 this week. Despite three separate attempts, the stock was held back. In the face of a broad market sell-off on Friday, the stock lost ground. AEOS recently announced a 3:2 stock split with a payable date of February 23rd. We are looking for a split run to ensue but it has yet to materialize. We are encouraged, however, by the fact that AEOS has formed a flag formation that is telling us the next target for AEOS is close to the $70 level. Friday's selling came on big volume of 2.7 million shares, more than twice the stock's 3-month average volume of 1.3 million. At its present position, AEOS has support at $54.00, then the 10-dma at $52.58 and finally the 20-dma at $50.18. Resistance is marked at the 5-dma at $56.60 and then at $58.00. A bounce off a support level on good volume, over 2 million shares by midday, might be a possible entry point for a new position on AEOS. Look for strength in the NASDAQ Composite Index (COMPX) and the CBOE Retail Index (RLX.X) when considering new play opportunities. We will maintain our stop at $51.50.

Picked on January 30th at $55.81
Change since picked -0.31
Stop Loss at $51.50