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Boohoo Share Price Can Tank Another 10%, Here’s Why

02-05-2021 Portsmouth, Hampshire, UK A Mobile phone or cell phone being held showing the boohoo app open on screen

Boohoo (LON: BOO) share price has rebounded from its fresh monthly lows. The shares are retesting a historical resistance level as the FTSE 100 index turned red for the third consecutive day. While the benchmark index has been 2.37% down in the past three days, Boohoo UK shares are still up 3.88% during this time.

During Friday’s trading session, FTSE 100 index fell by 74 points and was trading at 7,376 till press time. Major UK shares, including Boohoo stock, also showed minor losses. After a slight recovery at the start of this week, Bank shares were the hardest-hit sector today.

Boohoo Reveals Plan To Open Pop-Up Store

According to the latest reports, the top fashion retailer Boohoo has shared its plan to open a pop-up store in London. This will be the first-ever pop-up store by the brand, whose doors will remain open from March 25 to 26 on Great Portland Street.

One thing of concern for the large Boohoo shareholders is the new growth plan of the leadership. Even though the plan was passed after a recent shareholder vote, 37% of the shareholders still weren’t in its favor.

Although the issue hasn’t been reflected in the Boohoo share price, it still tells a lot about the relationship between the company and its major stakeholders. The proposed changes in the new growth strategy include a 50 million pounds bonus for the group CEO John Lyttle.

Boohoo Share Price Shows Signs Of Weakness

LON: BOO chart depicts that the shares are trading more than 7% below their YTD high of 58.2p. As mentioned in our previous Boohoo share price forecast, the 56p level is a major resistance to the price, which will need a lot of buying pressure to be broken. Furthermore, it is also clear from the chart that the price has broken below the upward trendline for the first time in the last three months.

Currently, Boohoo stock is retesting the trendline after a breakdown. In case of a rejection, I expect the price to retest the 200-day moving average again. A breakdown below 200 MA will signal a formation of the bearish head and shoulders pattern. This will be a 10% drop from the current level.

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Boohoo share price chart
Boohoo (LON: BOO) Chart