Aeropostale (ARO) – 04-24-2009
Aeropostale, yet another oldie that has come back on the scene. Somehow their numbers have continued to grow, but I’ll have to admit that I’m out of their target audience so I have no personal anecdotal data to give about them. The stock fell from $37.40 down to $12.52 in the course of a few months last year, but is breathing down the neck of the high again after another half dozen months. That gives this stock one of our favorite attributes: volatility. It also makes the stock interesting in both directions.
The bearish plays are whatever typical plays you would make when a stock breaks down. I wouldn’t trust a breakout anytime soon though due to the broader market conditions and the fact that there’s no real base unless you risk almost half. Therefore, that’s only for a longer term look, maybe after the 2009 holiday season if we see a base formed between now and then.
Triggers
- Below $28.00 – watch for short entries
- Above $37.50 – examine the breakout and see if it’s playable
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