Boohoo share price was in a consolidation mode as investors focused on the upcoming interim results and the UK economic outlook. The stock closed at 39.86p on Friday, meaning that it has fallen by 66% this year alone. What was once a high-growth blue-chip stock has turned into a penny stock. Its market cap has crashed to about 509 million pounds.
Boohoo stock price has been in a strong sell-off in the past few months as concerns about the company continue. The company has also struggled amid soaring inflation in the UK that has hit all industries, including fast fashion. This inflation will likely continue worsening in the coming months as pound sterling crashes to a record low against the US dollar.
BOO shares will be in the spotlight this week for two main reasons. First, according to The Times, the company has been canceling orders recently as demand slows. It has canceled orders from both Leicester and in its other key suppliers abroad as the outlook for the fast-fashion industry dimmed. One supplier told the newspaper that:
“Boohoo has cancelled a load of orders. We are just here to do the fast stuff and when they don’t need it, they just stop it in its tracks.”
Second, Boohoo shares will react to the upcoming interim results that are scheduled for Wednesday. Analysts have low expectations for the company and there is a likelihood that it will slash its guidance again.
Boohoo share price forecast
Turning to the daily chart, we see that BOO share price has been in a strong bearish trend in the past few days. It managed to move below the important support level at 51.35p, which was the lowest level in July this year. The stock has crashed below the 25-day and 50-day moving averages while the MACD has moved below the neutral point.
Therefore, the stock will likely continue falling as sellers target the next key support level at 30p. The stop-loss for this trade will be at 44p.