Where to next for the Boohoo share price?

Investors abandon Boohoo

Boohoo.com plc’s post-earnings bounce didn’t last long it seems. While the company might be looking to the future with hope, investors continue to head for the exit.

Like bigger rival ASOS PLC, Boohoo has faced a cocktail of problems, including supply chain issues, rising living costs, a surge in costly product returns, and perhaps most dangerously, the emergence of competitors like Shein that have made Boohoo and ASOS look like yesterday’s firms.

It has looked to cut costs in various ways, such as reducing the amount of stock it holds, as well as increasing automation. But with a less-than-impressive offering internationally and a return to in-store shopping a return to the glory days of 2020 seems unlikely.
Sentiment towards the stock remains negative. Of 25 analysts covering the shares, 12 have a ‘hold’ recommendation, while there are 7 ‘sells’.

How low can Boohoo go?

Boohoo’s share price, which is down around 6% year-to-date, is fast approaching its 32.65 pence December low, below which lies the September trough at 30p. Both levels represent possible technical downside targets with a fall through the 30p mark taking the share price down to levels last traded in September 2015.

Boohoo Monthly Chart

Immediate downside pressure should remain in play while the Boohoo share price stays below the last reaction high – the last candlestick which has a high, higher than the one to its left and right on the daily chart. This can be found at the 5 June high at 41.32p, some 16% above current levels.

Boohoo Daily Chart

Below the last reaction high, solid resistance can be found between the May and early June lows at 37.26 to 37.33p. Above this area the April-to-June downtrend line at 39.74p should also act as resistance, were it to be revisited.