March 12 Chart of the Day - American Eagle Outfitters
Precision oriented price action technical analysis by far provides the best edges and most setups for traders and investors across the markets so that's what we use for the basis of our reviews
American Eagle Outfitters (AEO) reports earnings after market close on Wednesday. Based on management's guidance analysts are expecting blah blah blah...
Consistent profitable investing and/or trading requires a structured, rules-based approach to price action analysis. Proven processes, disciplined risk-reward management, and precise execution create the foundation for long-term success.
When combined with powerful mental performance strategies, this method becomes the ultimate blueprint for thriving in any market, on any time frame.
In this analysis, we’ll take a price action technical approach to evaluate key levels and potential next moves in the stock.
We have featured over 450+ Charts of the Day since May 2023 and teach Price Action Trading for FREE to traders who join our Highly Rated Trade Room.
Monthly Chart
On the monthly chart we can see that after setting its $38.99 all time highs (ATHs) back in 2021 price experience extreme swings.
Price is now quickly approaching a long term previous support level in the $10 area and essentially is searching for a bottom.
All very typical price action movement but very unpopular with investors.
Weekly Chart
On the weekly chart we can see with much more clarity the up/down volatile movement.
Historically, price has created a change control zone roughly between $16.50 to $18.50.
Change control zones are one of the five price action tools we teach when charting anything. By definition, they are an area that represents where neither the bulls nor bears are in charge. Price can slash through the zone with seemingly reckless abandon, price can respect the top or bottom from outside it or within it. Or, price can trade aimlessly sideways within it. When price breaks away from the zone it can often get drawn back to it like a magnet. And in this case we see all of the above are true.
On this chart, price has crossed this zone more than two dozen times since 2018 and if history repeats itself in this scenario it could happen again, and again, and again in the future.
It goes without saying though, the only guarantee in the markets is that price cycles. It cycles up and it cycles down across all time frames and all charts and rarely, if ever, moves in a straight line.
Only time will tell for sure what price will do next...
We've layered in traditional Fibonacci levels as well as support/resistance and trend to help identify potential price levels of interest and/or future price targets.
Armed with precision oriented charts like these both traders and investors can formulate their respective plans.
So what's next?
We don't make predictions...
Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.
- Support/Resistance
- Trend
- Fibonacci
- Supply/Demand Zones
- Change Control Zones
ChartPros provides the exact methodology in its price action technical analysis courses to create charts like this with the most precise and accurate levels from which investors and traders can formulate their respective trade plans.
Take a look at the charts and let us know what you think. We'd like to hear from you in the comments sections.
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