CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure. CFDs are a leveraged product and can result in losses that exceed deposits. Please ensure you fully understand how CFDs work and what their risks are, and take care to manage your exposure.

ASOS share price set to trade higher as sales surge amid lockdown

Shares in ASOS could climb even higher in 2020 after the company revealed a surge in sales as consumers snap casual and activewear during lockdown, with the business expecting profits at the top end of its guidance.

Shares in ASOS could climb even higher in 2020 after the company revealed a surge in sales as consumers snap up casual and activewear during lockdown, with the business expecting profits at the top end of its forecasted range.

In its latest trading update, the online fashion retailer revealed that annual pre-tax profit is likely to come in at the upper end of market expectations after the company recorded a 10% increase in sales for the four months to the end of June.

Group sales over the period jumped to a little over £1 billion, up from £919.8 million last year, with retail sales up 10% to £983.3 million. Meanwhile, UK retail sales slid 1% to £329.2 million and US sales edged fell 2% to £124.9 million, while international sales pushed up 17% to £654.1 million.

‘Our performance in P3 shows that we are delivering against this aim despite the tough economic and social backdrop,’ ASOS CEO Nick Beighton said. ‘We have learnt a lot and adapted quickly, and ASOS finishes the period with improved underlying profitability.’

‘While we remain cautious about the consumer impact of Covid-19 looking forward, we are on track to deliver strong year-on-year profit growth and to return to positive free cash flow for the full-year,’ he added.

Covid-19 helps online sales surge at ASOS

The retailer’s strong performance in the face of challenging market conditions means that the company does not ‘foresee a material investory risk or write-off requirement relating to Covid-19’, with the business planning to repay cash to the UK government for furloughed workers.

‘As we said at HY results, sales were circa 20 to 25% lower when those measures were first introduced,’ ASOS said in its latest trading update on Wednesday. ‘We are therefore pleased to have delivered 10% sales growth for the period overall.’

‘This performance was supported by good new customer acquisition, strong growth in 'lockdown' product categories (casualwear, activewear, face and body), an overall improvement in underlying demand and beneficial returns behaviours showing more deliberate purchasing,’ the company added.

ASOS: Technical Analysis

Shares in ASOS are down by nearly 5% in today’s session, pushing below the 20-day moving average (SMA) and look poised to break below the 50-day SMA next and potentially the ascending trendline of support, according to Victoria Scholar, presenter and market analyst at IG.

‘Lately the stock has been trying to push above key resistance on a number of occasions at £35.60 suggesting there are some profit takers in the market following the stock’s stellar 245% ascent since the start of April,’ Scholar said.

‘July’s price action has been more range bound stuck between £30 and £35 roughly, suggesting a pause for ASOS before its next move. A break out of the range could provide some clues into its future trend direction.’

With today’s red marabuzo daily candle combined with negative divergence from the RSI momentum indicator, technical analysis suggests it could be more likely to break on the downside.

A more bearish case for the stock could be reignited with a push below its ascending trendline of support and a break below the psychological £30 round number, she added.

How to trade stocks with IG

Looking to trade ASOS and other stocks? Open a live or demo account with IG and buy (long) or sell (short) shares using derivatives like CFDs in a few easy steps:

  1. Create an IG trading account or log in to your existing account
  2. Enter ‘ASOS’ in the search bar and select it
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

Act on share opportunities today

Go long or short on thousands of international stocks with CFDs.

  • Get full exposure for a comparatively small deposit
  • Trade on spreads from just 0.1%
  • Get greater order book visibility with direct market access

See opportunity on a stock?

Try a risk-free trade in your demo account, and see whether you’re on to something.

  • Log in to your demo
  • Try a risk-free trade
  • See whether your hunch pays off

See opportunity on a stock?

Don’t miss your chance – upgrade to a live account to take advantage.

  • Trade a huge range of popular stocks
  • Analyse and deal seamlessly on fast, intuitive charts
  • See and react to breaking news in-platform

See opportunity on a stock?

Don’t miss your chance. Log in to take advantage while conditions prevail.

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Friday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.