Ocado Share Price to Continue Downward Trend After Recent Gains

Summary:

The year-to-date data shows that Ocado's share price has been on a long-term sell-off. This has resulted in Ocado losing 35 per cent.

The year-to-date data shows that Ocado’s share price has been on a long-term sell-off. This has resulted in Ocado losing 35 per cent of its value. Ocado is up by almost a percentage point in today’s trading session. However, the current bullish lean may not be long-term, and gain is unlikely to wipe yesterday’s session loss of over five per cent.

However, Ocado’s share price drop for the year to date is not surprising based on their last year’s financial reports. The reports showed that even though the company posted strong revenue for £2.5 billion, it still made a net loss of £223 million. This is significant for a company listed in the FTSE All-Share, FTSE 350 Low Yield, FTSE 350, FTSE 100 indices.

In a recent analysis done by Experts and posted in Yahoo!, the company had made a loss of 42 per cent over a period of 12 months. This was an underperformance compared with the markets that ended up gaining more than six per cent for the year. The loss can also help explain why 2022 has continued with the losses, as investors stay away from the stock that has underperformed the markets.

Ocado Price Prediciton

The daily chart below shows Ocado’s share price have been trading in a long-term bearish move for months. The prices have also been trading within a descending channel. Recently the prices hit the upper trend line of the channel and failed to break out of the market structure. This resulted in another aggressive downward move. However, today’s trading session has been bullish, with Ocado gaining almost a percentage point to trade at 1089p.

Therefore, I expect the price of Ocado to continue with its current bearish move in the coming trading session. In addition, the current market gains are likely a market correction, resulting in another aggressive downside move. There is also a high likelihood of today’s trading session closing below the opening price.