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Boohoo Share Price Gains Big But Remains Vulnerable

The Boohoo share price leapt 12.74% higher on the day, enabling the stock to recover all the losses suffered on Thursday. The gains come as investors took solace in the company’s reaffirmation of its 2023 full-year outlook despite an 8% drop in its first-quarter fiscal revenue. 

The UK online fashion retailer said higher product returns and tougher conditions when compared to the previous year that pandemic lockdowns boosted sales, making for a revenue drop by 8% to 445.7 million pounds. Sales of its products in the UK fell 1%, but the most significant hit was its US sales, down 28%. European sales fell 9% while sales in other parts of the globe were also down 15%. 

However, the company said its previous guidance for the 2nd quarter and full-year remained intact. Boohoo had forecast a return to sales growth in the 2nd quarter. 

The Boohoo share price fell 11.27% when the news was released on Thursday, recording a 6th consecutive losing session. The higher close of the day snaps this losing streak but is only the third day of gains in twelve. The Boohoo share price has fallen by 70% in the last year. 

Boohoo Share Price Forecast

The uptick of the day sets up a bullish engulfing candlestick pattern. This could enable the price action to take off from the 63.42 price mark (7 March and 14 June), targeting the 70.10 resistance level (9 May and 10 June lows). Above this level, the 76.12 resistance level forms an additional target to the north, being the site of the 10 May high and 19 May low. The 85.64 price mark forms yet another northbound barrier, followed by the 96.86 resistance level (ceiling of former rectangle pattern).

On the other hand, a decline below the 63.42 support level targets 52.30 initially (27 June 2016 low/16 June low). A further price deterioration creates access for the bears to target 45.18 (12 April 2016 high) and 39.12 (12 February 2016 low).

Boohoo: Daily Chart