American Eagle Outfitters, Inc. (AEO) was upgraded today by TheStreet's Quant Ratings service making it a great time to review the latest charts and indicators. I might take my twelve-year-old grandson to shop at American Eagle but I know that I am not their target audience so I will stick to my charts and indicators.
In this daily bar chart of AEO, below, we can see that prices and the 50-day moving average line have turned up from an August low. AEO turned down in November/December from around $19 and lost a few sizes over the next nine months. In addition to the 50-day average line turning positive we can also see that AEO has closed above the 200-day moving average line.
While the price low was in August the low in the On-Balance-Volume (OBV) line was seen in May. Buyers of AEO were more aggressive in June and July even though prices moved sideways. The OBV broke out on the upside as prices broke out on the upside. The trend-following Moving Average Convergence Divergence (MACD) oscillator moved above the zero line in late August for an outright go long signal.
In this weekly chart of AEO, below, we can see that prices are above the declining 40-week moving average line. Chart resistance is probably going to be encountered around $16 or so. The weekly OBV line is starting to edge higher after four months of sideways in-action. The weekly MACD oscillator gave a cover shorts buy signal in July and is moving up toward the zero line.
In this Point and Figure chart of AEO, below, we can see that prices held above the lows of 2014 and have turned up with a possible longer-term price target of $20.50.
Bottom line: A quantitative upgrade and improving technical studies make the long side of AEO more appealing. A decline below $12.50 would make the chart less attractive.