Buy Alert: December 17, 2013

Buy Alert:  December 17, 2013

 

Trade Details

Buy American Eagle (AEO) February $14 Calls for $1.10 or better

 

Why?

Clothing retailers are expecting a poor fourth quarter, and many companies have seen their stock prices slide.  And while the holiday shopping season may not be as good as expected, I believe the pessimism is a bit overdone.  I also believe some of the stronger clothing stores will rebound nicely.

AEO is one of those stocks I expect to turn around.  The share price is now below all three of its major moving averages.  The company remains profitable despite a challenging environment.  And, AEO’s balance sheet is very strong.

We’re going to buy February calls in anticipation of a rebound.

 

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Category: OTW Buy Alerts