We reviewed the charts of The Gap ( GPS) back on November 24 ahead of Black Friday and wrote that "I would not avoid the store if you find this apparel appealing but I would continue to avoid the long side of the stock. A base is needed before the stock becomes attractive." 
Shares of GPS surged higher Thursday evening after their earnings report but that strength quickly evaporated. Let's look at the charts and indicators of GPS.
In this daily bar chart of GPS, below, we can see that prices have been in a downtrend from May. Prices are trading below the declining 50-day moving average line and the bearish 200-day line.
The On-Balance-Volume (OBV) line has lost ground since May and tells me that sellers of GPS have been more aggressive than buyers.
The Moving Average Convergence Divergence (MACD) oscillator has made a higher low than in December even though prices have made a lower low. This is a bullish divergence but I would not get too excited about it just yet.
In this weekly Japanese candlestick chart of GPS, below, we see a bearish picture. Prices are in a downtrend below the declining 40-week moving average line. The weekly OBV line has declined since May and the MACD oscillator is bearish.
In this daily Point and Figure chart of GPS, below, we can see a downside price target of $13.
In this weekly Point and Figure chart of GPS, below, we can see a potential target of around $12.
Bottom line strategy: The selloff in GPS may be in its late stage but signs of a bottom have yet to appear. Continue to avoid the long side of GPS. We'll check how things fit in a few months.
