LONDON ,UK - NOVEMBER 20TH 2017: The homepage of the official website for the clothing brand Boohoo, on 20th November 2017.
Boohoo (LON: BOO) share price has been experiencing some serious headwinds for the last few weeks. The release of its earnings report on May 16 also failed to contain the selling pressure. Shares of the online fashion retailer have perfectly met my predicted price target of 40p, which was mentioned in previous articles.
The UK stock market showed a positive sentiment on Thursday as the FTSE 100 index gained 25 points. Till press time, the benchmark FTSE 100 index was still up 28 points. However, Boohoo shares were trading at 38.86p after a 1.4% drop during the initial hours of trading.
According to the most recent Boohoo news, Panmure has upgraded its rating of the company from ‘hold’ to ‘buy’. As per the investment bank, the latest earnings report shows signs of stabilization in the online fashion retailer. ASOS plc also released its financial results last week. The latest results showed that the company had to face a significant decline in sales and a loss during the six months ending in Feb’23.
This triggered a sell-off in not only the ASOS (LON: ASC) shares but also in its rival fashion retailer Boohoo Group plc whose earnings report was released later. Boohoo share price bounced after the release of its earnings report but couldn’t gain momentum.
Technical analysis of the LON: BOO chart shows that the shares are forming an inverted cup and handle pattern on the daily chart. This is a very bearish pattern, and a breakdown will make Boohoo share price forecast very bearish.
The oversold RSI on the daily and 4H timeframes resulted in a bounce in the past two weeks, which has now faded out. To avoid the bearish outlook, the stock needs to reclaim the 50p psychological and technical level. However, the inverted cup & handle pattern will only play out if the price breaks below 37.8p.
I’ll keep sharing my updated price outlook on Boohoo & other stocks in my free Telegram group, which you’re welcome to join.
This post was last modified on Jun 01, 2023, 10:30 BST 10:30