Ocado Share Price Still Under Pressure as Growth Concerns Remain

Summary:

In this Ocado share price forecast, we explain why the company's shares have recovered and what to expect going forward in the near term.

The Ocado share price has crawled back this month after struggling in the previous months. The stock is trading at 1,982p, which is about 9% above the lowest level in May. It is still 32% below the highest level this year. The firm has a market capitalization of more than 14.4 billion.

Ocado news. Ocado is a leading e-commerce and logistics company headquartered in London. The firm’s e-commerce solutions are powered using its joint venture with Marks & Spencer. Abroad, the company offers warehousing and logistics solutions to retailers like Kroger, Sobeys, and Bonpreu, among others.

The Ocado stock has struggled recently as investors question the company’s performance post-pandemic. The idea is that people will shop less online after the country reopens. There are also concerns about its profitability.

Most importantly, competition in the retail grocery industry has jumped. Recently, companies like Gopuff, Getir, and Gorillas have brought solutions that promise deliveries in as little as 10 minutes. These firms have attracted a substantial amount of investments recently. For example, Gopuff has already raised more than $2.4 billion from investors.

The OCDO share price has recently risen after Morgan Stanley analysts upgraded the stock from neutral to overweight. The analysts noted that the company has a massive opportunity as the retail sector rebounds.

Ocado share price forecast

The daily chart shows that the Ocado stock has underperformed this year. The stock declined below the 50% Fibonacci retracement level this month and then crawled back. It remains below the 100-day and 50-day moving averages. It is also slightly above the descending trendline that is shown in blue. Most notably, the stock has formed what looks like a head and shoulders pattern.

Therefore, in my view, I suspect that the stock has not yet recovered. The recovery will only be confirmed when bulls manage to push it above the two moving averages and the psychological level at 2,000p. Unless this happens, we can’t rule out another drop to 1,950p.