Earnings Play: Gap

Market chart showing uptrend
On Thursday, after market, Gap (GPS) is expected to report first quarter LPS of $0.66 compared to an EPS of $0.24 a year ago on revenue of approximately $2.3B vs. $3.7B last year. The company is a retailer of apparel and its current analyst consensus rating is 1 buy, 17 holds and 5 sells, according to Bloomberg. 
From a technical point of view, Gap's stock price has just gapped up and broken out to the upside of a rising channel that started to form around the beginning of April. The RSI is currently sitting above 60 and has been holding above a rising trend line since late-March. As long as price can hold above the $9.30 support level we should see price continue upward towards the $12.70 resistance level. If price can reach $12.70 then we should see a push towards $14.70. If price slips below the $9.30 support, price will probably fall to around $6.80 to continue the rising channel pattern.              

Source: GAIN Capital, TradingView
Related tags: Equities earnings

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