Technical Secrets: The Gap Inc (NYSE: GPS)

U.S. stock futures fell on Friday after consumer prices in December posted their biggest gains in 11 months, raising expectations of inflation gaining momentum this year.

The Labor Department’s Consumer Price Index, which excludes the volatile food and energy components, rose 0.3 percent last month. Economists polled by Reuters had forecast core CPI rising 0.2 percent.

Core CPI increased 1.8 percent in the 12 months through December, picking up from 1.7 percent in November.

“I don’t think CPI data changes our impression about monetary policy. December was a mild disappointment in terms of retail sales, as it came a touch below expectations,” said Art Hogan, chief market strategist at B. Riley FBR in Boston.

“But if there is any negative reaction to the data, it should get washed out as we open.”

Another set of data showed U.S. retail sales increased in December and figures for the prior month were revised higher, suggesting that the economy exited 2017 with strong momentum.

The Commerce Department said retail sales rose 0.4 percent last month. Economists polled by Reuters had forecast retail sales increasing 0.4 percent in December.

Futures snapshot at 8:43 a.m. ET (1443 GMT), Dow e-minis were up 63 points, or 0.25 percent, with 35,059 contracts changing hands.

S&P 500 e-minis were down 0.75 points, or 0.03 percent, with 179,279 contracts traded.

Nasdaq 100 e-minis were down 12.25 points, or 0.18 percent, on volume of 42,118 contracts.

JPMorgan Chase & Co rose 0.38 percent in choppy premarket trading after the biggest U.S. bank by assets reported profit that beat estimates, benefiting from higher interest rates and loan growth. (Source: Reuters)

Stock in Focus: The Gap, Inc. (NYSE: GPS)

The Gap, Inc. (NYSE: GPS) has grabbed attention from the analysts when it experienced a change of 2.39% in the current trading session to trade at $33.98. A total of 1,023,942 shares exchanged hands during the intra-day trade contrast with its average trading volume of 5.44M shares, while its relative volume stands at 1.37. Relative volume is the comparison of current volume to average volume for the same time of day, and it’s displayed as a ratio. If RVOL is less than 1 it is not In Play on this trading day and Investors may decide not to trade it.  If RVOL is above 2 it is In Play and this is more evidence Investors ought to be in the name.  When stocks are *very* In Play one can see a RVOL of 5 and above.  The higher the RVOL the more In Play the stock is.

Day traders strive to make money by exploiting minute price movements in individual assets (usually stocks, though currencies, futures, and options are traded as well), usually leveraging large amounts of capital to do so, therefore they trade on Stocks in Play. In Play Stocks are volatile enough to produce good risk and reward trading opportunities for both bull and bear traders intraday. Most company stocks have very little volatility. They generally move extremely slowly and they only produce big price swings when the company produces good or bad trading results, which may only happen a couple of times a year at best.

In deciding what to focus on – in a stock, say – a typical day trader looks for three things: liquidity, volatility and trading volume. Liquidity allows an investor to enter and exit a stock at a good price (i.e. tight spreads, or the difference between the bid and ask price of a stock, and low slippage, or the difference between the predictable price of a trade and the actual price). If a stock does not have good liquidity then it may take some time before a broker is able to negotiate a deal to buy or sell a stock and the broker may not be able to get the sell or buy price that the trader is looking for. This is a problem for day traders and it could mean the difference between a profitable and non-profitable trade.

Traders have different rules for what constitutes liquidity and a good guide is the volume of trades and volume of shares that are traded each day. 100,000 shares traded per day would be a minimum for most traders and some require 1,000,000.

Trading volume is a gauge of how many times a stock is bought and sold in a given time period (most commonly, within a day of trading, known as the average daily trading volume – ADTV). A high degree of volume indicates a lot of interest in a stock. Often, a boost in the volume of a stock is a harbinger of a price jump, either up or down.

Volatility is simply a measure of the predictable daily price range—the range in which a day trader operates. More volatility means greater profit or loss. After a recent check, The Gap, Inc. (NYSE: GPS) stock is found to be 2.81% volatile for the week, while 2.40% volatility is recorded for the month.

Technical’s Snapshot:

The stock has a market cap of $12.98B and the number of outstanding shares has been calculated 391.13M. Based on a recent bid, its distance from 20 days simple moving average is 1.04%, and its distance from 50 days simple moving average is 9.10% while it has a distance of 29.21% from the 200 days simple moving average. The company’s distance from 52-week high price is -3.56% and the current price is 61.68% away from 52-week low price. The company has Relative Strength Index (RSI 14) of 61.87 together with Average True Range (ATR 14) of 0.90.

Stock’s Valuation:

Past 5 years growth of GPS observed at 1.60%, and for the next five years the analysts that follow this company is expecting its growth at 7.20%. The stock’s price to sales ratio for trailing twelve months is 0.84 and price to book ratio for the most recent quarter is 4.29, whereas price to cash per share for the most recent quarter are 9.59. Its quick ratio for the most recent quarter is 0.80. Analysts mean recommendation for the stock is 2.90. This number is based on a 1 to 5 scale where 1 indicates a Strong Buy recommendation while 5 represents a Strong Sell.

Disclaimer: Any news, report, research, and analysis published on Alphabetastock.com are only for information purposes. Alpha Beta Stock (ABS) makes sure to keep the information up to date and correct, but we didn’t suggest or recommend buying or selling of any financial instrument unless that information is subsequently confirmed on your own. Information in this release is fact checked and produced by competent editors of Alpha Beta Stock; however, human error can exist.

Donald S. Wiggins

Donald S. Wiggins is passionate about business and finance news with over 5 years in the industry starting as a writer working his way up into senior positions. He is the driving force behind alphabetastock.com with a vision to broaden the company’s readership throughout 2016. Wiggins is an editor and reporter of “Services” Category. Email: donald.wiggins@alphabetastock.com

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