Boohoo (LON: BOO) share price has been in a downward spiral for the past couple of weeks. The shares have plunged to a fresh yearly low after showing a significant recovery at the start of August. Technical analysis reveals that a relief bounce could be around the corner.
The market sentiment is shifting in the UK stocks as the FTSE 100 index has shown a great recovery. The benchmark index is up more than 110 points today as the markets opened after a long weekend. However, Boohoo shares continued to tumble and were down 1.26% till press time.
As per the latest data, retail sales are on a decline in the UK. In August 2023, the retail sales have had the biggest drop since March 2021. This is very concerning for the stockholders of the major retailers like Boohoo plc.
Another reason behind the tanking Boohoo share price is the decrease in online sales in the country. The latest data shows that online retail sales fell by 1.2% in July 2023. The trend is expected to continue in the coming months. This makes the H1 results of Boohoo very critical.
A high timeframe technical analysis reveals that the LON: BOO has fallen into a key demand zone. After a bounce from the same demand zone in July, the shares failed to break above the 200 MA on the daily chart. As a result, the stock is retesting the critical demand zone once again.
For Boohoo share price forecast to flip bullish, the shares need to break above the 200 MA which currently lies at 43.08p. A breakdown below 30p support would be extremely cataclysmic for the bulls with another 30% drop on the cards.
In the meantime, I’ll keep sharing updated Boohoo forecasts and my personal trades on my Twitter, where you are welcome to follow me.
This post was last modified on Aug 29, 2023, 12:08 BST 12:08