Today’s show on Wallstrip was on AEOS or American Eagle Outfitter. You can visit Wallstrip Conversations for more discussions. I LOVED the comment about AEOS being like Abercrombie (ANF) for poor people.

I wanted to post this so much earlier but work got in the way and I had to keep my priorities straight. So in case this is still of interest, here is what I think of the AEOS chart.

First, I own no AEOS and have no plan on getting in soon. This chart shows about a year of daily data for AEOS. We can see a nice uptrend spanning from December of 2005 to about mid-May of 2006. Than the price started trading in range for a consolidation period from mid-May to early August 2006. In early August in broke upwards again and resumed the uptrend from earlier in the year.

In the last couple of days, we have seen the growth slow down significantly and just like at the previous consolidation phase, both the OBV and the MACD curves have started trending down. I would think that AEOS should start trading range for a little bit, if it finds comfortable support and resistance levels. How it behaves in the range will determine whether it will break the range in a up or down trend.

So if I was riding the previous trend, I would be looking for exits soon. If I wanted to trade Eagle Outfitter in range, I would wait for the price to drop and find support. To trade the next trend, someone would have to wait for the consolidation to be over and decide from there if long or short is a better choice.