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Gap (GPS) Testing a Key Support for the Bullish Scenario

The GAP (GPS) has been retreating for the past few sessions since it failed to tag 27.00. It closed the 5/16 session just above the 24.50 handle. Last time we looked at the GAP (GPS), it had just broken above a consolidation range and thus opened up a bullish outlook. We noted the possible support levels for a pullback and a retracement to 24 was the maximum expectation for a pullback.

Gap (GPS) Daily Chart

(click to enlarge)

Pullback; support:
- Indeed the pullback is now approaching 24.00. It tagged a rising trendline is proving support around 24.50.
- This 24-24.50 area has a few support factors.
1) The rising trendline as noted above
2) The 100-day simple moving average (SMA)
3) And it is around the middle of the previous range. 
- Furthermore, the RSI in the daily chart is near 40 and should hold above 40 in a bullish market. 
- If you are bullish on GPS, this 24-24.50 area is great for reward to risk.
Bearish Outlook:
- This is because a break below 24.00 should turn you away from the bullish outlook and instead focus on the range support. 
- Because this would be a false bullish breakout, I would anticipate a bearish outlook, meaning I would NOT rely on the range support just above 20.00.
- The weekly chart shows that if price then breaks below 20, it opens up a larger range support around 17.00.
- BUT, if this bearish outlook is held off, and price holds above 24.00, there is still upside towards the large range resistance around 30-30.50.

Gap (GPS) Weekly Chart

(click to enlarge)