AEO's Earnings Surprise Not a Surprise Technically

American Eagle Outfitters, Inc. (AEO) gapped up this morning in reaction to earnings.

Let's notice that the stock thrust out of a year-long rounded-base pattern, which defines the early price action as an "upside breakaway gap," that initiates a new, bullish phase for AEO.

The next meaningful resistance area resides at 16.90-17.00, which if (when?) hurdled, will trigger intermediate-term upside projections into the 21.00-22.00 target zone.

At this juncture, only a decline that fills the gap into the 15.00-14.80 area will compromise the timing of the upmove to the above-mentioned targets.

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