Boohoo (BOO) Share Price Outlook: Signs of a Rebound Fade
The Boohoo share price continues to struggle as worries about the company’s growth remain. The stock is trading at 190p, which is a few points below the October 20th high of 210p. It has crashed by more than 56% from its highest level in 2020.
Boohoo is a well-known e-commerce company that dominates the fast-fashion industry in the UK. It is also seeing strong growth in other countries like the United States and in Europe.
The company’s business model has always been about sourcing products cheaply and selling them at an attractive price to its customers. However, this model is facing a tough challenge lately as the cost of doing business rise.
Indeed, the company cited the cost of shipping in its last financial results. Companies like Boohoo are seeing the cost of labour, cotton, and shipping rise. At the same time, they are facing a lot of competition from the likes of Shein that have cheaper products.
The Boohoo share price has erased some of the gains it made last week when it announced that it will settle an ongoing lawsuit in the US. The company was accused of misleading its customers by offering them discounts that were not really discounted.
Boohoo share price forecast
On the daily chart, we see that the spectacular sell-off of Boohoo shares has faded in the past few days. Indeed, the stock has struggled moving below the support at 180p. It remains below the 20-day volume-weighted moving average. Still, it seems like it is forming a bearish flag pattern that is shown in green.
Therefore, while there is a possibility of a rebound, the outlook, for now, is bearish. This view will remain until the stock manages to show some bullish signs. A deeper bearish breakout will be confirmed if it drops below 180p.