Boohoo (LON: BOO) share price has broken above the 58.2p level for the first time since August 2022. This means a 63% price surge in the shares of Boohoo UK since the start of the year. Many analysts are taking this move as a sign of a bullish reversal on a higher timeframe. However, the price still needs to show some strength above 58.2p resistance before calling it a win for the bulls.
On Friday, UK shares showed an overall positive price action as the benchmark FTSE 100 Index turned green for the third day in a row. Till press time, the index was up 0.27% after gaining 21 points during today’s session. Boohoo shares also added to their weekly gains and rose by 0.97%.
Recently, the proposed changes in the new Boohoo growth strategy have been in the news. The changes will enable the company’s CEO, John Lyttle, and other top executives to bag millions of dollars in bonuses. This growth plan remained a bone of contention between the management and the shareholders. Nevertheless, the Boohoo share price forecast has remained unaffected by this disagreement as the price kept making higher highs.
In the last few years, Boohoo UK has changed its marketing strategy. The company has now become more customer-centric and is integrating multiple brands to expand its presence in the US.
The daily chart of LON: BOO shares shows higher highs and higher lows since the start of 2023. After multiple breakout attempts, the shares have finally broken above the key resistance level of 56p. It is also evident from the chart that the price is respecting the upward trendline on its daily chart.
The ongoing Boohoo share price surge can also be attributed to the successful bounce from the 200 moving average, which has now become a support. Nevertheless, I expect another pullback in the coming days as the Relative Strength Index (RSI) is showing a bearish divergence. To avoid this pullback, the shares need to close a week above 56p.
This post was last modified on Mar 31, 2023, 13:28 BST 13:28