American Eagle Outfitters bullish trend line break

Updated
I've been closely watching American Eagle Outfitters for this moment. With a P/E under 10, the stock is attractively valued. It has an 8.4/10 analyst summary score and is rated highly undervalued by S&P Capital IQ. The average analyst price target of $20.33 implies 25% upside from the current price. With an RSI of about 57 on the daily chart, the stock has room to run. It ought to hit about $16.75 soon. It might then pull back a bit before heading up to $17.75. The best-case scenario for the medium term is probably about $20.
Note
AEO has so far been a losing trade due to the analyst forecasts coming down. Overall I remain positive on this very undervalued stock with a 4% dividend, and I plan to just hold it for a while. However, you might want to wait for the analyst forecasts to stabilize or even turn upward before entering. I'm not certain we've seen the end of the earnings revisions from analysts.
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