The Gap, Inc. operates as an apparel retail company. It offers
apparel, accessories, and personal care products for men, women,
children, and babies under the Gap, Old Navy, Banana Republic,
Piperlime, Athleta, and Intermix brands. Its products include maternity
apparel; loungewear, sleepwear, intimates, and active apparel for women;
and handbags, shoes, jewelry, personal care products, and eyewear for
men and women; women's apparel, footwear, and accessories for sports and
fitness activities, including crossover apparel and casualwear; and
luxury and contemporary apparel and accessories. The company also has
franchise agreements with unaffiliated franchisees to operate stores in
Asia, Australia, Eastern Europe, Latin America, the Middle East, and
Africa under the Gap and Banana Republic brands. The Gap, Inc. offers
its products through company-operated stores, franchise stores,
e-commerce sites, and catalogs.
The Gap's stock has formed a head and shoulders (H&S) pattern.
Please take a look at the 1-year chart of GPS (Gap, Inc) below with my
added notations:
Over the last (4) months GPS has created a very important support
level at $40. That $40 support is also the current 'neckline' for GPS'
H&S pattern. Above the neckline you will notice the H&S pattern
itself. Remember, patterns such as an H&S need to confirm to have
the meaning they imply. Confirmation of the H&S would occur if the
stock were to break below its $40 support. If GPS does break that level,
the stock should move lower from there.
The Tale of the Tape: GPS seems to have formed a head & shoulders
pattern. Although a trader could go long at $40 expecting a bounce, the
stock's pattern implies an eventual breakdown. If that happens, a short
trade should be entered on a break of the $40 level.
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