Gap Inc. declined from $46.84 to $17.00 (A-B) and then settled in a wide horizontal trading range between $22 and $30 (dashed lines). The recent rise above the top of this range signalled a breakout, renewed investor interest and the start of a new up-leg (C). Behaviour indicators including the rising 40wMA and the rising trend-line (solid line) confirm the positive status. The stock is currently overbought and a minor correction may occur toward $29-30, but only a sustained decline below ±$26 would be negative. Point & Figure measurements provide targets of $39 and $43. The large trading range (dashed lines) supports higher targets.
Monica Rizk is the senior Technical Analyst and Ron Meisels is the president of Phases & Cycles Inc. (www.phases-cycles.com). may hold shares in companies profiled.
Chart source: www.decisionplus.com
Monica Rizk
Ron Meisels