- Summary:
- The Deliveroo share price needs to break the 85.70 price mark to complete the pattern and ensure a push toward the 100p mark.
The Deliveroo share price is down 1.49% on the day after failing to breach a critical resistance. The stall in the advance move comes after two days of strong gains that have seen the food delivery app’s price rise nearly 6%.
The decline on the day comes as the company faces a UK Supreme Court challenge over workers’ collective bargaining rights. The legal challenge was filed by the IWGB union, the umbrella body of independent contractors that service the gig industry.
The lawsuit comes after Deliveroo signed a collective bargaining rights deal with the GMB union over pay. IWGB argues that the GMB deal still classifies its members as independent contractors. Under labour laws, independent contractors receive no pay for days off due to illness and are not paid on holidays.
They also have no access to other worker benefits such as company health insurance or paid leave. IWGB is seeking a new classification of its members. Deliveroo is contending the IWGB’s position, saying that the UK courts have always classified Deliveroo riders as self-employed. The company also says that its GMB agreement gives its riders “guaranteed earnings, representation and benefits.” A court date is yet to be set.
Deliveroo Share Price Forecast
The evolving inverse head and shoulders pattern requires a break of the 85.70 neckline (10 August low and 6 September high) for the pattern to be confirmed. This opens the door for a potential completion of the measured move at the 78.6% Fibonacci retracement of the 16 August to 1 September price swing at 95.64.
This move would need to take out the resistance barriers at 88.56 and 91.48, which house the 50% and 61.8% Fibonacci retracement levels. Above this completion point, the 101.04 resistance (4 August and 16 August highs) is the next available target, followed by the 107.08 and 114.38 (14 April, 21 April and 3 May highs) price barriers.
This outlook is invalidated if the bulls fail to break the 85.70 neckline. This leaves room for a pullback move that initially targets 79.94 (12 May and 18 July lows). The 76.20 trough (1 September low) becomes the new downside target if the bulls cannot defend 79.94.
A breakdown of this level ushers in new depths, with the 27% Fibonacci extension at 69.48 presenting itself as a likely candidate for a pitstop. Below this level, the 61.8% Fibo extension at 60.86 comes into the mix as another potential target to the south.
ROO: 4-hour Chart
