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Gap Inc (NYSE:GPS) continues to struggle as same-store sales in its Gap stores, while trending in the right direction, are still showing year-over-year declines and sales in its Banana Republic stores are showing widening year-over-year declines. With retail apparel stocks struggling across the board, even as we head into the all-important holiday shopping season, we do not have high hopes for GPS in the run up to its earnings announcement on Nov. 16, after market close.

We are looking for GPS to break below its current support level at $26 on its way down to its next level of support just above $24. The stock is certainly capable of fast dramatic moves, and we wouldn’t be surprised if GPS falls before the company even has a chance to release its earnings.

‘Buy to open’ the GPS December 25 Puts (GPS171215P00025000) for a maximum price of $1.00.

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