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Boohoo Share Price Surges 5.8% Is the Rally Back?

The Boohoo share price is up 5.89% on the day and looks poised to make it three winning days in four after investors took solace in the company’s settlement of a class-action lawsuit in the US. The lawsuit had alleged that Boohoo misled its California customers in some of the promos it held in that area. Boohoo said that the settlement was not an admission of guilt or liability. The settlement is subject to review by the US District Court in the California Central District.

Also fueling demand on the stock are rumours of a potential takeover bid for troubled online fashion retailer Missguided. Missguided is close to administration after several unpaid manufacturers and suppliers issued a petition against the company after several missed payments. 

Missguided is said to owe millions of pounds and is now on the verge of bankruptcy. Boohoo is said to be in talks with administrator Teneo, although it is unclear if Boohoo wants to buy out the entire business or just the Missguided brand. Boohoo and Teneo are yet to comment on the deal. 

The Boohoo share price has begun to pick up in recent weeks after the company announced plans to overhaul its executive payment policy, pending shareholders’ approval amid the steep fall in its share price in recent months. Thirteen Wall Street analysts have offered a Boohoo share price target of 112.50p, with a hold recommendation. This gives the stock an upside potential of 25.39%.

Boohoo Share Price Outlook

The uptick seen on the day has sent the Boohoo share price clear of the 85.64 support (lower border of completed rectangle). This move gives the bulls clear skies to approach the 96.86 price mark (ceiling of completed rectangle). Above this level, additional resistance is seen at the 109.10 price barrier. 

On the flip side, a decline below the 76.12 support will give the bears access to the 70.10 support (5-13 May lows). Below this level, the 63.42 support level comes into the picture, being the site of the 7 March low. Additional targets to the south are found at 52.30 and 45.18.

Boohoo: Daily Chart