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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.

This information has been prepared by IG, a trading name of IG Markets 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. See full non-independent research disclaimer and quarterly summary.

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