Why I Shorted Aeropostale

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Earlier this month, I had a nice profit from Aeropostale. I covered, and it spent the next couple of weeks (circled below) noodling around. I re-shorted it yesterday for a couple of reasons;

(1) It had the makings of a huge, huge head and shoulders pattern;

(2) More importantly – and this is very "un-chartish" of me – it was just about the only maker/seller of clothes that wasn't soaring to the moon. Everything else – be it ANF, LTD, LULU – seemed to just lurch skyward. But Aeropostale must be out of favor amongst consumers, so I figured that anything this weak in the face of super-strong industry brethren must have real troubles.

I have, just as I did earlier this month, covered to take profits. But I daresay this stock could be in the single digits within a year's time.