HOT TOPICS LIST
- MACD
- Fibonacci
- RSI
- Gann
- ADXR
- Stochastics
- Volume
- Triangles
- Futures
- Cycles
- Volatility
- ZIGZAG
- MESA
- Retracement
- Aroon
INDICATORS LIST
LIST OF TOPICS
PRINT THIS ARTICLE
by Koos van der Merwe
With the approach of Christmas, and the shopping that goes with it, is it worth buying shares of The GAP?
Position: Sell
Koos van der Merwe
Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.
PRINT THIS ARTICLE
GAPS
The Gap and Patience
11/26/13 03:18:40 PMby Koos van der Merwe
With the approach of Christmas, and the shopping that goes with it, is it worth buying shares of The GAP?
Position: Sell
| This was a news report that came out on November 22nd. "Gap Executive Reveals How Retailer Struck Gold With 'Game Changing' Reserve In Store Program." Will this new strategy increase sales over the coming Christmas buying period? Will profits increase? Should one start buying the share now, or is it too late? |
|
| Figure 1. Elliott Wave count suggesting weakness ahead. |
| Graphic provided by: AdvancedGET. |
| |
| The chart in Figure 1 is a daily chart with an Elliott Wave count suggesting that the share price is in a new bull trend, with a WAVE I topping out on November 18th at $42.56. We all know that a WAVE I is followed by a WAVE II which can be as much as 100% retracement. With the lower end of the gap at $38.90 as shown on the chart, and knowing that a share price will always correct to fill the gap, and with the RSI and MACD indicator both suggesting weakness, the correction looks as though it will definitely happen. Does this correction present a buying opportunity? |
|
| Figure 2. Omnitrader chart showing buy signal on the Vote line. |
| Graphic provided by: Omnitrader.. |
| |
| The chart in Figure 2 is an Omnitrader chart showing where The GA gave me a buy signal on November 5th when the price was $37.54. The share price had 5 days previously bounced off the lower external band line which confirmed the strength in the buy signal. The price also broke through the Verve trailing stop, however it rose in a gap to the upper external band line, suggesting weakness ahead. The RSI 14 period has not yet given a sell signal, and neither has the TDIJak indicator, but weakness in the near future with the price falling to fill the gap can be expected. Finally, do note that the Red Green Long 6 Strategy has given a stop signal, suggesting a possible sell is on the cards. I would not be a buyer of The GAP at present levels, but would wait for the share price to fall and fill the gap. The RSI indicator and TDIJak indicator should also confirm a buy. Patience is the name of the game. |
Has been a technical analyst since 1969, and has worked as a futures and options trader with First Financial Futures in Johannesburg, South Africa.
| Address: | 3256 West 24th Ave |
| Vancouver, BC | |
| Phone # for sales: | 6042634214 |
| E-mail address: | petroosp@gmail.com |
Click here for more information about our publications!
PRINT THIS ARTICLE
|
Request Information From Our Sponsors
- StockCharts.com, Inc.
- Candle Patterns
- Candlestick Charting Explained
- Intermarket Technical Analysis
- John Murphy on Chart Analysis
- John Murphy's Chart Pattern Recognition
- John Murphy's Market Message
- MurphyExplainsMarketAnalysis-Intermarket Analysis
- MurphyExplainsMarketAnalysis-Visual Analysis
- StockCharts.com
- Technical Analysis of the Financial Markets
- The Visual Investor
- VectorVest, Inc.
- Executive Premier Workshop
- One-Day Options Course
- OptionsPro
- Retirement Income Workshop
- Sure-Fire Trading Systems (VectorVest, Inc.)
- Trading as a Business Workshop
- VectorVest 7 EOD
- VectorVest 7 RealTime/IntraDay
- VectorVest AutoTester
- VectorVest Educational Services
- VectorVest OnLine
- VectorVest Options Analyzer
- VectorVest ProGraphics v6.0
- VectorVest ProTrader 7
- VectorVest RealTime Derby Tool
- VectorVest Simulator
- VectorVest Variator
- VectorVest Watchdog