- Summary:
- Ocado share price has formed a cup and handle pattern on the four hour chart. This has hinted at more upside in the near term
Ocado share price has declined by more than 0.65% today as traders react to the latest economic data by the British Retail Consortium (BRC). OCDO shares are also falling because of the looming shortages due to the coronavirus pandemic. It is trading at 2,485p, which is slightly below this year’s high of 2,550p.
What’s happening: In a statement yesterday, Ocado warned that UK shoppers could face shortages and price increases because of the rising coronavirus cases and the complexities brought about by Brexit. Due to the virus, many manufacturers in the UK have either shut down or scaled-down their operations, which could lead to shortages.
Further, while the UK and the EU reached a deal, there are complexities at the border that are making it difficult to import. In fact, truckers have threatened to increase their costs, which could be moved to customers.
Ocado share price is falling even after the latest report by BRC. In a statement, the consortium said that total retail sales rose by 1.8% on an annual basis. This increase was below the three-month average of 2.5%. It was driven by a surge in online shopping. Online sales rose by 52.2% in December. Ocado, which has a joint venture with Marks and Spencer has been a key beneficiary of this trend.
Retailers are having a mixed day today with Tesco share price rising by 0.40% while Sainsbury’s shares have risen by 0.97%. Morrison shares have dropped by 0.10%.
Ocado share price forecast
On the four-hour chart, we see that Ocado share price formed a triple-bottom pattern at the 2,230 level. It then started bouncing back, reaching a high of 2,545p this year. It has also moved above the 50-period and 25-period exponential moving averages. Most importantly, it seems to be forming a cup and handle pattern.
Therefore, the shares will likely continue rising as bulls aim for the upper side of the cup at 2,643, which is 6% above this price.
Ocado shares chart
