Gap Inc. (GPS) is unable to keep up with the S&P 500 (SPY) broader market making news highs.  The GPS gap down has put the stock into new price discovery looking for solid demand.

GAP REVIEW

On October 11, 2013 GPS gapped down breaking through a daily pivot of demand damaging the longer term trend. See Figure 1 below.

Peterson102313.jpg

KEY LEVEL

GPS created supply over head into $37.50 with this bearish gap down.  Key Demand levels exists at $34.50 and $32.50.

THE TRADE

Look to short GPS at $36.10 with a stop placed over $37.50.  Targets are $34.50 and $32.00.

Disclosure: Newsletter Subscribers are short from 10/22/2013