As discussed in “The retail industry offers timely diversification,” the broad retail industry is a top sector choice for the coming cycle. What many find unusual about this positive view of the retail industry (NYSE:XRT) is that talk of a recession is daily news. Why would anyone invest in retail stocks if we are in a recession or on the doorstep of one?
There are several reasons for the positive view of the industry, and American Eagle Outfitters (NYSE:AEO) in particular. I will begin with the technical backdrop which is largely a reflection of the economic cycle.
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