The technical picture of the GAP Inc. stock (NYSE: GPS) on our daily chart shows that the share price managed to break and stay above a medium-term downside resistance line taken from the high of May 18th. That said, in order to get a bit more comfortable with the upside scenario, we would prefer to wait for a push above the 26.12 barrier, marked by the high of September 29th.
If that move happens and the stock rises above the 26.12 barrier, this will confirm a forthcoming higher high and the share price may continue moving further north, as more buyers could join in. GPS might then travel to the 27.98 obstacle, or even to the 29.30 zone, marked by the high of August 24th. If the buying doesn’t stop there, the next possible target may be at 31.01, which is the highest point of August.
Although the RSI is just fractionally below 50, it continues to oscillate around that number. The MACD, despite moving slightly to the downside, continues to run above zero, but sits fractionally below the trigger line. The two indicators do not paint a clear picture, hence why we will not place too much emphasis on them and instead, wait for a violation of one of our barriers.
On the downside, a move back below the aforementioned downside line and then a price-drop below the 21.77 hurdle, marked by the lowest point of October, would confirm a forthcoming lower low. Such a move might scare off some buyers temporarily, potentially allowing the stock to fall further to the 19.35 zone, which is the low of January 27th. If the slide continues, the next possible target could be at 18.30, marked by the low of October 22nd.
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