Francesca's, Gap Stock Approaching Important Technical Levels

Francesca's (FRAN) and Gap (GPS) stocks are making bold moves today

Mar 21, 2017 at 11:16 AM
facebook twitter linkedin


Retail stocks have been on the move recently -- and mostly to the downside, with brick-and-mortars succumbing to competitive pressures from e-tailers. Two retail stocks swinging wildly today are Francesca's Holdings Corp (NASDAQ:FRAN) and Gap Inc (NYSE:GPS). Digging deeper, both FRAN stock and GPS stock are also trading near key Fibonacci retracement levels, which we'll explore in-depth below.

FRAN Breaks Out on Earnings

FRAN is on fire today, adding nearly 12% at the open and last seen 2.1% higher at $15.86 following an earnings beat. In fact, at the stock's intraday high, it was just a chip-shot from the 38.2% retracement of its June-to-December rally. However, the shares have yet to overtake that level, and it appears they're now grasping for a foothold at the 50% retracement of the same time frame, which would bode well for FRAN's future, technically speaking.

fran stock chart fibonacci retracement

Options traders are likely welcoming today's bullish price action. FRAN stock sports a 20-day call/put volume ratio of 3.91 across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), with long calls nearly quadrupling puts.

GPS in a Dangerous Spot

GPS has been in a world of hurt. The retail stock is down 4% at $22.53, and has now shed nearly 6% week-to-date. Boding especially poorly, the shares have decisively breached the 50% retracement of their May-to-November burst higher, and could once more be headed back down to the 61.8% Fibonacci level.

gap stock chart fibonacci retracement

Call buying has been popular among GPS options traders. The shares sport a 10-day ISE/CBOE/PHLX call/put volume ratio of 1.89, in the bullishly skewed 82nd annual percentile. However, given that 10% of the security's total float is sold short -- which would take a week to cover at GPS stock's typical trading rate -- it's perhaps more likely that short sellers are purchasing calls as upside insurance.

Don't miss Schaeffer's free weekly stock market forecast. Sign up now for Monday Morning Outlook.

A Schaeffer's exclusive!

The Expert's Guide

Access your FREE trading earnings guide for Q3 before it's too late!


  
 
Special Offers from Schaeffer's Trading Partners