Gap Inc. (GPS) is slated to report its latest quarterly numbers on Thursday. Let's see how the charts are shaping up.
In this daily bar chart of GPS, below, we can see a rally from last August into May and then a correction unfolding over the past three months.
Prices are trading below the declining 50-day moving average line and just above the rising 200-day moving average line. The 200-day line was tested last week. The On-Balance-Volume (OBV) line shows weakness from May telling us that sellers of GPS are being more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is bearish.
In this weekly Japanese candlestick chart of GPS, below, we see a mixed picture. Prices are still in an uptrend, but are testing the rising 40-week moving average line. The weekly OBV line has rolled over the past three to four months suggesting some liquidation (selling) of long positions. The MACD oscillator is bearish and pointed down towards the zero-line.
In this daily Point and Figure chart of GPS, below, we can see an upside price target in the $33 area.
In this weekly Point and Figure chart of GPS, below, we can see a tentative downside price target in the $22 area.
Bottom line strategy: GPS has weakened since May and that correction does not appear over.
