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 22, 2001

On Wednesday, in the face of a nasty bout of selling on Wall Street, AEOS hit our stop loss at $57.00. We had hoped to grab a little more profit before the stock splits 3:2 on Friday, but with our stop, we still were able to walk away with some green. We will continue to watch AEOS after the split for other trading opportunities.

Picked on January 30th @ $55.81
Profit/Loss +1.19 (+2%) (Stopped Wednesday @ $57.00)
Best Profit +4.25 (+7%)

February 20, 2001

Clothing retailer American Eagle Outfitters was unsuccessful in its third attempt to conquer resistance. The overwhelmingly negative market conditions were no match for the feeble volume that AEOS produced on Tuesday. The stock turned in less than 600,000 shares worth of volume compared to its three-month average of 1.5 million. Late in the day, the stock came within 50 cents of hitting our stop at $57.00 but managed to stay in play, barely. This Friday, AEOS will split its stock 3:2 and the split run seems to be slowing down. We will continue to hang in for a last burst of profit before we retire this play. If your risk tolerance allows for short-term plays, you might look for a quick bounce off support at the 10-dma at $57.15, or a strong move up through resistance at $60.00 on volume of 750,000 shares traded by midday. Look for strength in the NASDAQ Composite Index (COMPX) to lead the charge for that type of rally. We will maintain our stop at $57.00 until we drop this play on Friday per our normal policy.

Picked on January 30th at $55.81
Change since picked -1.38
Stop Loss at $57.00

February 18, 2001

American Eagle Outfitters posted a 6% gain for the week ahead of their awaited stock split. We are now just 5 trading sessions away from a 3:2 stock split for clothing retailer American Eagle Outfitter. We began coverage of this play in late January after the company announced a split. Our intention from day one was to profit from the stock's "split run". A split run in simple terms is the bullish gains a stock makes prior to its actual split. On Friday AEOS made a noble attempt to move higher but in the face of a negative broad market, lost ground. This coming week we are looking for a final burst higher before the actual split on Friday the 23rd. The volume in the stock has been steadily increasing as we draw closer to the split date. Last week the average volume for the stock was 1.7 million shares (21% above the 3-month average of 1.4 million). Consider opening a short-term play on AEOS if it bounces off support at the 5-dma at $58.00 or the 10-dma at $56.89. Resistance is the recent high of $60.06. We are guarding our gains on this play by tightening our stop to $57.00.

Picked on January 30th at $55.81
Change since picked +2.88
Stop Loss at $57.00