On Tuesday, November 24, American Eagle Outfitters (AEO) stepped into the earnings spotlight, reporting that third-quarter earnings came in at 28 cents per share. Taking a tax benefit out of the equation, AEO would have earned 21 cents per share, falling a penny shy of the consensus estimate.

Quarterly sales dropped to $749 million from $754 million, with same-store sales falling off 4%. AEO did not provide a fourth-quarter forecast, which it will do when it reports November sales on December 3; this will allow the company to account for the sales from the Thanksgiving weekend.

"Zumiez (NASDAQ: ZUMZ) a mall-based sporting clothes retailer which markets to 12- to 24 year old, is poised for a breakout," says technician Leo Fasciocco.

The editor of Ticker Tape Digest notes, "With profits forecast to grow 30% for the next two fiscal years, we see good chances for Zumiez to move higher."

The advisor points out that the company has 235 stores and focuses on clothing for action sports as snowboarding, BMX, skateboarding, and surfing. ZUMZ sells popular youth brands like Billabong, Burton, Hurley, Quiksilver, Vans, and Spy Optic, as well as private-label goods.

Technically, he explains, "ZUMZ's chart shows a breakout at $34 and then one at $38. The stock personality tends to show a pattern of breakouts followed by short moves. In other words, the stock is stair-stepping higher. That is typical with its prior patterns and we would expect a breakout soon based on the past action of the stock."

Indeed, he says, "The stock's technicals are ideal." The advisor points to a bullish momentum indicator and an accumulation-distribution line that is in a strong up trend. Overall, he suggests, "That indicates excellent accumulation is still taking place."

Fasciocco is recommending accumulation of ZUMZ as a partial position now with further buying to be done on a move over $42. He is targeting a rise to $52. To protect on the downside, he suggests a trading stop near $36.

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