AEO Trade Update

AEO was a short trade idea from Feb. 2

Thus far, especially on a swing basis, AEO is acting very well.

AEO is still in good shorting position. The idea was at the red arrow, which as a swing trade, it continues to make lower lows with only 1 noise candle thus far.

The real trade we are looking for would be this...

This would start the next leg down, the first leg down was on that sharp gap down which is a breakaway gap and very bearish.  Thus far, the consolidation pattern after the first leg has failed and that's where we entered the trade, so the next leg down is what we are looking for here.


Here are the updated stops...

 This is the 2-day trend channel which is wider and is what I prefer initially...

Here's the 1 day, which is tighter and guarantees a profit is you entered on the day it was featured. AEO is just about breaking the trend channel to the downside which should accelerate the downside move.

I would just be patient with this one, especially if you are already at a profit, give it some time to do it's thing as it is moving in our favor and as we wanted to see. if you are considering this as a new position, which would give you exposure to discretionary if you are looking to diversify, I would prefer the wider stop at $14.25, but even there you still have a pretty good looking risk:reward profile. The tighter stop can certainly be used, or if you are treating this as a swing trade, it's already a swing short, the current swing stop would be a daily close with a low above $13.81