Banc of America Securities downgraded trendy clothier Gap Inc. (GPS: sentiment, chart, options) to "neutral," with analyst Dana Cohen stating the benefit of expenses and inventory control that has boosted profit recently may run out in the near future. The broker also made note of the company's Old Navy unit, stating its merchandise unit continues to erode and likely won't see improvement until autumn.

Right out of the gate, GPS shares are trading slightly higher in parity with the broad market. The stock is flirting cents above the 19 level, up 0.32% from yesterday's close. From a longer-term perspective, the stock has been bouncing off the 15-17 neighborhood since mid-2005, consistently capped by resistance at the 22 level.

Meanwhile, near-term options players don't seem to be betting on an upward-facing breakout from consolidation. The stock's Schaeffer's put/call open interest ratio of 1.09 ranks in the 74th annual percentile. Simply put, near-term options speculators have been more bearishly aligned toward GPS only 26% of the time during the past year.