Recently, we looked at Abercrombie and Fitch $ANF and saw that price fell to a key support area around $21.40. Abercrombie and Fitch (ANF) - Should We Buy the Dip?We discussed a possible bounce from this to test the $25-$26 area. However after a very brief 2-day bounce off of this support, price fell sharply in a bearish breakout.ANF Daily Chart(click to enlarge)Bearish Breakout in Bullish Trend:- First of all, we can see that price action formed a top after breaking below the $21.40 support/neckline.- Also price broke below all the moving averages as well as a rising trendline. - These are all bearish signs, but the overall market over the past year has been bullish.- Are we going back into the larger downtrend? Or is this just a pullback within a newly developing bull run. At the Crossroad:- Indeed, ANF is at the crossroad.- Looking at the weekly chart we can see that the overall trend has been bearish, but the 2017-2018 rally broke above the falling trendline as well as the 200-week simple moving average (along with the 100-, and 50-week SMAs). - The RSI has pushed above 70 and is now testing 40. If the 2017-2018 bull run is still the primary trend at the moment, the weekly RSI should hold above 40. - Price should probably hold above $17.50. But a deep retracement to $14.60 could still be within the context of a longer-term bull trend.- I would not like this scenario of price retracing to $14.60. unless it is along with the rest of the market i.e. a 10%+ drop in the S&P. - Instead, I would monitor price for consolidation in the $17.50-$20 area. If price does stabilize here, I would be more confident of the bullish scenario.- The bullish scenario would first have the $25 area in sight, with $32.50 (2016-high) as the bullish target in the medium-term.ANF Weekly Chart(click to enlarge)