The Ocado share price will be in focus today after a major fire happened in the company’s biggest warehouse. The OCDO stock ended the week at 1,805p and has declined in the past four consecutive days.
Ocado news. Ocado is a leading technology company headquartered in the UK. It makes money in two ways. First, it has a joint venture with Marks & Spencer, a leading British retailer. Revenue from this joint venture falls into the company’s Ocado Retail segment. The company then makes money through its solutions business, where it provides services to other retail companies like Kroger.
The Ocado share price will be in the spotlight today for two main reasons. First, the company will be in focus because of the Freedom day. This is when the government will end all its coronavirus measures, including masks. Businesses in England will also be allowed to reopen at full capacity. This is seen as a negative thing for Ocado, which was a major beneficiary of the coronavirus pandemic. As more people spent time at home, they turned to Ocado and other online companies for their shopping.
The OCDO shares will also be watched closely as the company faces the challenge of fire. The company’s biggest warehouse caught fire on Friday after a collision of two robots. The fire affected a small portion of the company’s warehouse. It was the second fire this month. Therefore, there are concerns as the frequency of these fires increases.
On Friday, I wrote that the OCDO share price will likely have a bearish breakout to 1,500p in the longer term. Part of this thesis happened after the stock managed to move below the important support level at 1,827p, which was the lowest level on June 3.
The shares have also moved below the 25-day and 50-day moving averages. It has also formed what looks like a descending triangle pattern. Therefore, the shares will likely keep falling as investors target my initial estimate of 1,500p. On the flip side, a move above the resistance at 1,950p will invalidate this estimate.
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