Score 8.8 (out of 10): GAP/THE is poised for a -23.4% drop in 3 months

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What’s Going On Here?

America’s clothing and apparel retailer The Gap (NYSE: GPS) has had a bad year with shares down (-54%) in 2022 and the company has fired its last CEO in July after an abysmal.

Why Now?

GAP/THE has reached a new medium term low. Previously, during similar occasions, GAP/THE shares had a median return of -23.4%, over the following 3 months based on 10 historical occasions with 8 of those showing negative returns (80% hit ratio). This sell signal for GAP/THE received a high score of 8.8 (out of 10). This insight was generated on 2022-September-30 with last price of 8.21.

What’s This Company About?

GAP/THE is in the Retail-Apparel/Shoe business. Based on the last 2 years’ risk/return profile, this asset is seen as Very Risky. Ticker symbol: GPS US.

What’s My Risk / Reward and Time Horizon?

We found 3 months to be the optimal trade horizon, after testing a number of possible alternatives (accuracy of previous returns). Otherwise consider closing out this trade once the target level of 6.29 (-23.4%) has been reached. Based on GAP/THE’s recent up and down swings, LongShortBets suggests considering to set a stop loss level for this insight at 8.81 (last price at 8.21), which is equivalent to a 7.3% rally.

Returns during similar periods:

The chart above shows the previous returns (in %) based on similar setups with the most recent ‘insight’ shown under (1), the second most recent ‘insight’ under (2), etc.

Previous episodes:

-22.8% (April-2022), -24% (February-2022), -22.1% (November-2021), -24.5% (July-2021), -37.6% (February-2020), -24% (December-2019), 5.3% (August-2019), -28% (March-2019), 3.8% (November-2018), -6.3% (September-2018).

Historical Chart:

Summary:

NameGAP/THE
ViewDown
Star (1 to 10)8.8
Target-23.4%
Time3 months
Hit Rate80%

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