Kaminsky's Call: The Gap Stock, Out of Fashion?

Who wants to shop at The Gap now?

Shares tumbled yesterday after the retailer stunned investors with disappointing store sales for June.


The question facing investors now? Were The Gap's disappointing numbers a one-time occurrence (and maybe a buying opportunity), or the start of a disturbing trend?

My "Call-to-Action" is to be cautious on this one. Both the technicals and fundamentals are out of fashion.

As The Strategy Session's special guest David Berman of Durban Capital told me after the show yesterday, The Gap's inventory was high coming into the quarter and remains a problem, making it more likely that future numbers could trend downward.

In terms of the technicals, Carter Worth, Chief Market Technician at Oppenheimer Asset Management, saw yesterday’s selloff as confirmation of stock's terrible price action over the past two months.

Going forward, I remain concerned about the company's margins in the wake of widespread discounts. I would not be surprised to see some type of earnings shortfall when the company reports next month.

The key will be the July same-store sales numbers.

Before pulling the trigger, wait on The Gap. It could be just a matter of time before this stock gets marked down.

"The Strategy Session," hosted by David Faber and Gary Kaminsky, airs weekdays at Noon ET on CNBC.

Gary Kaminsky does not hold any equity positions.

The content of this blog is published in the United States of America and persons who access it agree to do so in accordance with applicable U.S. law.

All opinions expressed in this blog are solely the opinions of Gary Kaminsky and do not reflect the opinions of CNBC, NBC UNIVERSAL or their parent company or affiliates, and may have been previously disseminated on television, radio, internet or another medium. You should not treat any opinion expressed by Mr. Kaminsky as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Mr. Kaminsky’s opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Kaminsky, CNBC, its affiliates and/or subsidiaries are not under any obligation to update or correct any information provided on this website. Mr. Kaminsky’s statements and opinions are subject to change without notice. No part of Mr. Kaminsky’s compensation from CNBC is related to the specific opinions he expresses.

Past performance is not indicative of future results. Neither Mr. Kaminsky nor CNBC guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed on this website or on the show. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than invested. Investments or strategies mentioned on this website or on the show may not be suitable for you. This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. You must make an independent decision regarding investments or strategies mentioned on this website or on the show. Before acting on information on this website or on the show, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from your own financial or investment adviser.