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 15, 2001

American Eagle Outfitters hit another 52-week high at the end of trading today. The stars appeared to be aligned for this specialty retailer of all-American casual apparel. Both major indices staged a nice rally and this renewed confidence was fully manifest in AEOS. Thursday's volume was recorded at 1.9 million shares, well above the three-month average of 1.4 million. Next Friday, the 23rd, AEOS will split its stock 3:2; ahead of this date, we are looking for more from this split run play. Possible entry points for new plays might include a bounce off support at $58.00. A surge through resistance at $60.06, the new high, with heavy volume might also make a nice entry point. We are going to adjust our stop loss on this play to $54.00 to lock in a profit.

Picked on January 30th at $55.81
Change since picked +4.13
Stop Loss at $54.00

February 13, 2001

American Eagle Outfitters traded lower on Tuesday after making another attempt to conquer resistance at $58.00. Tuesday's trading volume came in at 1.1 million shares, light compared to the normal three-month average of 1.4 million shares. Historically, new levels are conquered on heavier volume, so we weren't surprised to see the attempt fail. Next Friday, the 23rd, AEOS will split its stock 3:2, so no later than Thursday of next week, we will exit this play. Ahead of that date, look for another rally attempt to try and take out resistance at $58.00. Below that support is now marked at $56.00 and then at the 20-dma at $52.80. If you are looking for a short-term play, possible entry points might include a bounce off support on good volume, 1.5 million by midday, or a similar move through resistance. Continue to look to the NASDAQ Composite Index (COMPX) and the CBOE Retail Index (RLX.X) for additional play support. We will post a stop loss at $51.50.

Picked on January 30th at $55.81
Change since picked +0.32
Stop Loss at $51.50

February 11, 2001

American Eagle Outfitters finished the week with a fractional loss. We are now just two weeks away from the awaited 3:2 stock split scheduled for the 23rd. Leading up to that event, we are still hopeful that a split run will emerge and put some profit into this play. On Friday the stock actually gained $1.62 for the day, which ultimately lightened the loss for the week. Earlier in the week investors decided to grab some profits. This came on the heels of some profit warnings out of the retail sector. The trading volume has been about average this week at 1.6 million shares. On Friday the stock found support at the 20-dma at $52.35, which will serve as the first support level. Resistance is overhead at the 10-dma at $56.22 and then up at $58.00, followed by the 52-week high at $59.88. Those considering a new play on AEOS might look for a bounce off support or a strong move through resistance on heavy volume, meaning at least 750,000 shares traded by midday. Continue to watch for market support in the NASDAQ Composite Index (COMPX) and the CBOE Retail Index (RLX.X) when considering starting a new play. We will post our stop just below support at $51.50.

Picked on January 30th at $55.81
Change since picked -0.56
Stop Loss at $51.50