Ocado shares: what to expect from trading statement

Buoyed by its deal with M&S and the growing market for its technology around the globe, Ocado seems ready to break higher from its current short-term bearish pattern.

When is Ocado’s trading statement?

Ocado is expected to release a trading statement for the current quarter on 10 December.

Ocado statement – what to expect

Perhaps the main element to look for in Ocado’s update will be its assessment of how the new partnership with Marks & Spencer (M&S) is proceeding. The venture has now run for three months, and is expected to have provided an overall boost to Ocado’s performance, although the statement may be light on numbers. Nevertheless, with Neilsen figures this week pointing to a continued increase in the amount of grocery shopping conducted online the outlook seems promising for Ocado’s business, especially now it can attract customers looking to shop from M&S’ food range.

The statement may provide updates on other initiatives as Ocado looks to partner with other grocery providers around the globe, perhaps the most important part of the business and the part of the Ocado story that has driven the huge gains in its share price in recent years.

How to trade Ocado’s earnings

Ocado’s shares have seen their volatility decline over the past two months, even as the share price has lost ground since late September. The 14-day average true range (ATR) has dropped back from over 130 in early November towards 80, with declines like this normally preceding moves higher in recent months.

Ocado share price – technical analysis

The shares have formed a descending triangle from the October peak, bound by trendline resistance, with a bounce towards resistance in early November resulting in a sharp drop.

The shares have found support around £21.60, forming the base of the triangle. A rally back above £24.00 would likely signal a breakout to the upside, while a drop below £21.30 would open the path to the downside, including the 200-day simple moving average (SMA) of £20.42.

Bright outlook for Ocado

Despite a hit to the shares since October Ocado continues to enjoy a strong outlook, bolstered by its technology deals and the new partnership with M&S. The technical outlook is encouraging, with the shares forming a base in recent weeks that could well point to fresh upside into late December and early January.

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