The Boohoo share price has gone nowhere in the past few weeks. The stock indeed the day at 320p, which was below the weekly high of 335p.
What happened: Early this month, Boohoo reported strong full-year results even as the company battled criticism for its supply chain issues. Its sales rose by 41% as people turned to the internet to shop. The company’s revenue rose to more than $2.43 billion from $1.67 billion a year before.
Its profitability also improved to more than $241.6 million during the year while its revenue growth for this year is expected to drop to 25%. The company is also set to benefit from the online brands it acquired when Debenhams collapsed.
Further, the shares have weakened because of the ongoing rotation from lockdown stocks to reopening ones. This is as investors move their funds from companies that did well during the lockdown to those that are set to do well as the lockdown goes on. Indeed, lockdown stocks like Ocado have done worse while reopening ones like Carnival and Cineworld have done well. So, what next for the Boohoo stock price?
The daily chart shows that the Boohoo share price has been in a tight range in the past few weeks. The stock has remained a few points below the 25-day and 50-day moving averages and formed what looks like a descending triangle pattern.
In price action analysis, this is usually a bearish sign. It has also been stuck slightly above the 38.2% Fibonacci retracement level. Therefore, in the immediate short term, the stock will remain in the current range and then break out lower. However, in the long term, the shares will likely bounce back, helped by the company’s strong growth.
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