The Boohoo share price is under pressure as investors continue to watch the ongoing happenings in the UK clothing industry as John Lewis closes several stores. The stock ended the day at 332p, down from the intraday high of 350p.
What happened: Data released by the Office of National Statistics (ONS) showed that the price of clothing declined the most in 30 years in February. This helped to drag the overall inflation, which declined to 0.4% during the month. It was a sign that the sector is being affected by the new wave of the pandemic.
Meanwhile, the Boohoo share price is also reacting to the changing landscape in the UK fashion industry. In a statement, John Lewis, a leading fashion partnership said that it would close 8 more stores in a bid to preserve cash. This decision will put in line more than 1,460 jobs at risk. Most of these stores will be in Aberdeen.
In the past few months, more well-known UK fashion companies have gone out of business because of the pandemic. To some extent, that has helped online fashion companies like Boohoo and Asos increase their market share. For example, Boohoo has acquired several brands from Debenhams on the cheap.
Also, investors are focusing on the ongoing investigations into Boohoo’s manufacturing activities by the US government.
On the daily chart, we see that the BOO share price formed a double-top pattern at 380p this month. It then declined and reached a low of 311p on March 8. The price is at the same level as the 25-day and 15-day exponential moving averages (EMA).
The Relative Strength Index (RSI) has also remained at the neutral level of 50. Therefore, the shares may break-out lower as bears attempt to move below 300p. However, a move above 350p will invalidate this trend.
