Boohoo’s share price surged by 8 percent in yesterday’s trading session after opening the markets at 59.60p. However, despite a strong push to the upside in the late hours of the trading session, the company opened today’s session with a strong push to the downside and, at one point, was down by 2.5 percent despite opening with a gap up of almost a percentage point.
Today’s price drop comes amidst reports that the company is being investigated by the Competition and Markets Authority (CMA) for what it terms as the company’s lies about its efforts on sustainability. According to reports, the UK regulator will scrutinize Boohoo and other fast fashion companies to determine whether they used the sustainability claims to greenwash their products.
Sarah Cardell, the interim CMA chief executive, indicated the regulators will not be hesitant to take enforcement action if Boohoo is found guilty of lying about sustainability to push their sales to customers. She continued by saying the steps were taken to ensure that customers who want to buy green should be confident of getting the value for their money and emphasized why misleading eco claims needed to be dealt with.
Despite recent negative media and the past few trading sessions, including today, showing signs that Boohoo’s share price may be headed downside, I still remain bullish on the company. For starters, despite today’s trading session showing strong signs of a bearish trend in the early hours, the intraday trading has been very bullish.
Therefore, I expect prices to rise throughout the session. There is a high likelihood that we may see prices hitting the 66p resistance level by the end of the day. There is also a high likelihood that the current intraday push to the upside will see prices pushing past the 70p price level in the next few trading sessions.
However, would the price drop to trade below yesterday’s price low of 57.56, then my bullish analysis will be invalidated. It will also mean the share price is in a bear market.
This post was last modified on %s = human-readable time difference 11:57