From a high near $35 in 2007 (not shown) American Eagle Outfitters declined to $6.98 (A), rallied toward $20 (B) and then declined to $10 (C). From this low, it had a sharp rise to $23.94 recently (D) to signal the breakout from an extremely bullish technical pattern known as a “W” formation (dashed lines). A minor pullback toward $20 may occur but only a decline below $18.50-$19 would be negative. Point & Figure measurements provide targets of $24 and $28. The large “W” formation (dashed lines) supports higher targets.
Monica Rizk is the senior technical analyst for Phases & Cycles Inc. (www.phases-cycles.com). Ron Meisels is a contributor to the www.NA-marketletter.com website and Tweets at @Ronsbriefs. They may hold shares in companies profiled. Please see the site for a glossary.Report Typo/Error