The company pre-announced strong earnings.
Schottenstein said their stores are open and safe to shop at. Strong same store sales, even at 50% capacity due to COVID, has helped propel their stock to new 52-week highs.
When asked about being in the mall, Schottenstein said the mall is not dead and they're very excited about their denim business.
Schottenstein was also bullish on their Aerie brand which has been red hot. He said Aerie has been at the forefront of the body positivity movement and customers love it.
Let's check out the charts of AEO.
In this daily bar chart of AEO, below, we can see that prices have climbed higher the past 12 months with many sideways or shallow corrections so prices do not get extended/overbought. Prices are above the rising 50-day moving average line and above the rising 200-day line. With the 200-day line intersecting around $18.50 or so, AEO is approaching two-times the value of this long-term average. That is one measure of being overbought.
The On-Balance-Volume (OBV) line shows a long and steady rise to tell us that buyers of AEO have been more aggressive for months and to confirm the price gains. The Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.
In this weekly Japanese candlestick chart of AEO, below, we see a bullish picture. The current candles are positive looking. The slope of the 40-week moving average is positive but AEO is close to twice the level of this indicator. The MACD oscillator is bullish.
In this daily Point and Figure chart of AEO, below, we see the software is projecting an upside price target in the $38 area.
In this weekly Point and Figure chart of AEO, below, we used a traditional even dollar scaling in an attempt to generate a still higher price target than the daily chart above. The chart suggests that the $29 area was the price objective which has been reached and exceeded. This might be another sign that tells us that prices are overbought.
Bottom line strategy: The charts and indicators for AEO are all bullish but edging towards overbought. Traders who may be long AEO should consider a sell stop at $29 - I would not want to give back too much of the gains if there is a deeper correction.