The Deliveroo share price has lost momentum after soaring to an all-time high recently. The ROO stock is trading at 313p, which is about 21% below its highest level this month. This means that the shares have moved to a bear territory.
In general, things have been going relatively well for Deliveroo. First, the company had a strong first half of the year as its gross transaction value rose by 102% to more than 3.385 billion pounds. Its revenue rose by 82% to more than 922 million pounds while the number of active customers rocketed higher.
At the same time, its loss narrowed from more than 128.4 million in H1 2020 to 104 million pounds. As a result, the company reiterated its forward guidance. It expects that its GTV will rise by between 50% and 60%.
Deliveroo also benefited from a court ruling in June. The ruling by a London court confirmed that Deliveroo riders were self-employed and not employees. This was a major victory for the company. Besides, classifying riders as workers would have been a relatively costly thing.
Meanwhile, the company has secured multiple partnerships as it expands its ecosystem. It is now delivering products for Boots and Amazon. At the same time, Germany’s Delivery Hero has taken a stake in the company and there is chatter about a potential deal.
Deliveroo share price forecast
The daily chart shows that the ROO share price has been under intense pressure lately. This has seen it sink into the bear territory. It has also declined to the 50% Fibonacci retracement level and moved below the short and longer-term moving averages. It has also formed a descending channel that is shown in red.
Therefore, while technicals look bad, I believe that the stock will soon rebound as investors buy the dip. If this works, the next key level to watch will be at 332p. This view will be invalidated if the stock declines to 300p.