GPS closes below its opening price unable to hold early session gains
Gap Inc. (GPS) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, GPS ended the month 5.94% higher at 13.37 after losing $0.26 (-1.91%) today on low volume, strongly underperforming the S&P 500 (0.77%). Trading $0.24 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices missed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (GPS as at Jul 31, 2020):
Friday's trading range has been $0.69 (5.06%), that's slightly above the last trading month's daily average range of $0.66. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for GPS.
One bullish candlestick pattern matches today's price action, the Bullish Hikkake Pattern. The last time a Bullish Hikkake Pattern showed up on July 10th, GPS actually lost -4.03% on the following trading day.
After trading down to 13.18 earlier during the day, the share bounced off the key technical support level at 13.24 (S1). The failure to close below the support might increase that levels significance as support going forward.
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Hikkake Pattern" stand out. Its common bullish interpretation has been confirmed for Gap. Out of 99 times, GPS closed higher 53.54% 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 four trading days, showing a win rate of 52.53% with an average market move of -0.02%.