Boohoo: more good news for the online retailer?
The AIM retailer has bounced back since its fall in March. Our chartist looks at the potential outcomes.
3rd June 2020 08:55
by Alistair Strang from Trends and Targets
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The AIM retailer has bounced back since its fall in March. Our chartist looks at the potential outcomes.
Boohoo Group (LSE:BOO)
Once again Boohoo (LSE:BOO) is one of these shares where we managed to make it seem we could see the future.
Our outlook last November gave criteria for a solid bounce from 150p. At the time, it was trading around 260p and our worst fear, a GaGa movement actually did appear.
From 9 March, the shares doom was set and in a plunge of insanity, it hit 133p on 18 March, closing the day 'safely' above 150p.
Obviously, we lack a crystal ball which foretold of Covid-19, we do not revisit anything previously written and change it, just to suit reality.
In this instance, it is worth taking a look at what we wrote earlier as from our perspective, the drop was simply a matter of necessary arithmetic, once the criteria had been met.
The deadly GaGa movement (gap up, gap down) in the share price tended make it inevitable and now, we're seriously impressed with the strength of rebound being experienced.
As an online retailer, Boohoo appear well placed to enjoy some strong future results as we move into a world which shall doubtlessly start to find itself repulsed at the thought of browsing through clothing racks.
The situation Boohoo now finds itself in suggests share strength above 399p should bring travel up to an initial 430p with secondary, if bettered, at a longer term 520p.
In the event the share price manages exceed 520p, we've a problem as we currently cannot calculate any higher.
Should such a price level appear, doubtless someone shall email to ask us to again "run the numbers" against the share.
Finally, we have a fascinating little morsel to mention regarding this. For some reason our software suggests once above 406p, future rises shall prove difficult to restrain.
Also, in terms of problems, the price needs to retreat below red on the chart, presently 205p, to justify concern, if not flat panic.
Source: Trends and Targets. Past performance is not a guide to future performance.
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
Alistair Strang is a freelance contributor and not a direct employee of interactive investor.
All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, or interactive investor will be responsible for any losses that may be incurred as a result of following a trading idea.
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea.
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