GPS closes above its opening price after recovering from early selling pressure
Gap Inc. (GPS) Technical Analysis Report for Jun 30, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, GPS ended the month 41.8% higher at 12.62 after edging higher $0.11 (0.88%) today, underperforming the S&P 500 (1.54%). Today's close at 12.62 marks the highest recorded closing price since June 8th. Trading up to $0.27 lower after the open, Gap managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range in a lackluster session.
Daily Candlestick Chart (GPS as at Jun 30, 2020):
Tuesday's trading range has been $0.73 (5.9%), that's below the last trading month's daily average range of $1.03. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently lower than usual for GPS.
During the whole day, prices traded within the previous day's range, unable to trade above the prior day's high or below the previous day's low forming an Inside Bar.
Unable to break through the key technical resistance level at 12.69 (R1), the share closed below it after spiking up to 12.84 earlier during the day. The failure to close above the resistance could increase that levels significance going forward. After having been unable to move lower than 12.09 in the prior session, the market found buyers again around the same price level today at 12.11. The last time this happened on June 19th, GPS gained 8.26% on the following trading day.
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous low" stand out. Its common bullish interpretation has been confirmed for Gap. Out of 553 times, GPS closed higher 51.72% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after nine trading days, showing a win rate of 51.54% with an average market move of 0.11%.