Apparel retailer Gap received a price target hike to 24 on Friday, a strong vote of confidence after the stock's more-than 80% advance following an October breakout. Shares of GPS stock rallied early Tuesday.
Wells Fargo analyst Ike Boruchow raised his price target to 24, from 20, on the stock early Friday. The note kept an overweight rating on the stock, and said the analyst was adjusting models and price targets in retail, specialty soft lines and e-commerce following "a material move in the space," according to The Fly.
Gap quietly broke out of a six-week cup base in late October. The breakout occurred in weak trade, but bounced multiple times off support at its short-term, 10-day moving average as shares advanced. That quickly hoisted the stock to an 88% gain by Dec. 12, after which shares have paused in tight trade.
The chart bears a resemblance to a short stroke pattern, and also to two other patterns: the high-tight flag and a three-weeks tight. But it doesn't quite meet the criteria for any of those.
GPS Stock Vs. Apparel, Shoes Peers
So the question now is whether the pause will hold long enough for the chart's 21-day exponential moving average to catch up with the consolidating price action. If the two meet, that would mark a possible buy point for aggressive investors.
Shares were up more than 3% in early trade Tuesday.
Gap is part of the 34 stock apparel, shoes and accessories retail group. Its $7.85 billion market capitalization puts it at a fraction the size of companies like TJX ($104.7 billion) and Lululemon Athletica ($61.8 billion).
Nine stocks in the group turned in gains of 20% or better over the past month.
Among those, Bath & Body Works is up 32% in December, and poised to top a June high at 43.11 after a five-week rally. American Eagle Outfitters is up more than 20% and in a profit-taking zone following a late October breakout.
Abercrombie & Fitch has rallied 192% from an early June breakout. Lululemon Athletica has climbed 25% following its October breakout.
Buckle and Shoe Carnival have also posted significant fourth-quarter gains.
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