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Fan Yang

Gap Inc. (GPS) Continues Downtrend; I Would Not Rely on Support

Gap Inc. $GPS has been in a choppy uptrend since 2016 when price found support in the $17-$18 area. After coming up to $35 in early 2018 however, price has been in a bearish trend. I think we are in another leg of a primary bearish trend that started in 2013-2014 when price formed a double topped (see weekly chart).

GPS Weekly Chart

(click to enlarge)

Bearish May:
- The market has been doing the sell in May and go away thing with Gap.
- Price broke below some a common support around $24.35 and now is breaking another support around $21. 
- I think with such a strong dip, it is going to fall below $20 as well and drop towards the $17-$18 lows form 2016. 
- On the long-term, monthly chart we can see the RSI hold under 60 and is falling towards 30. This is a sign that the bearish momentum from 2014-2015 is still in play. 
- Thus, I think the $17-$18 support will be weak, and a break down would open up bearish continuation towards a common and critical support area in $10-$12.
- This is the only place I would consider for this name at the moment. The apparel industry is just not an attractive industry right now.

GPS Monthly Chart

(click to enlarge)

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