Boohoo share prices rose in the Monday trading session by 2.94% to trade at six-week highs of 37.14 GBX, hitting six-week highs in the process, before declining slightly to trade at 36.90 GBX at the time of writing. The company’s shares have risen by almost 6% in the last 4 trading sessions to continue with its uptrend going back to March 18th. The company declined significantly in January and February, when it lost 11.29% and 6.32% of its value, respectively. However, the stock has made a turnaround since March and with gains of 7.5% to date.
With the UK economy showing signs of exiting recession, we are likely to witness better returns in the coming days. Notably, the company will be releasing its earnings report in three weeks’ time, and that could see investors reposition themselves by readjusting the volume of their holdings of the penny stock.
The decline in February was partly attributed to the refusal by some lenders to postpone the payment of the £75 million portion of its £325 million debt taken earlier in 2023. The company insists that its liquidity is sound, but the loan, which is due for repayment in a year’s time will likely affect its ability to realise its financial targets this year, and that could be reflected in its earnings report.
The company reported net sales of £729 million in the last half of 2023, missing the forecast estimate of £772 million. Having said that, Boohoo seems to have shaken off the negative sentiment arising from the Panorama scandal, and this could help it build a stronger position in the second quarter of the year.
Technical analysis
Boohoo share price is currently bullish-leaning, as indicated by the RSI indicator. However, the buyers will need to keep the price above the 36.44 pivot to sustain the upward push. Furthermore, they are likely to encounter resistance at 37.40, but a move past that level could build the momentum to test 38.02. On the other hand, a move below the 36.44 pivot will favour control by the sellers, with support likely to come at 35.74. A continuation of control by the sellers at that mark could break the first support and move to establish the second one at 35.14-thereby invalidating the upside narrative.
