Sainsbury’s share price is up sharply today as investors cheer the retailer’s holiday boost. The shares are up by more than 3%, making it the best-performing company in the FTSE 100. Other retailers are having a good day with Morrison, Ocado, and Tesco shares rising by more than 0.50%.
What happened: Sainsbury, the giant British retail chain, said that its business was strong in the holiday season even as most of the UK remained in lockdown. In a note, the firm said that its profit for 2020 was to jump by £50 million to £330 million.
This performance comes as the firm’s revenue for the three months to January 2 soared by 8.6%. This was higher than what most analysts were expecting. Non-food sales rose by 6% while groceries soared by 7.4%. Most importantly, the company delivered about 1.1 million online orders.
What else: Sainsbury’s share price is also rising because of the just concluded Brexit deal. Retailers have generally received reprieve because the UK and the EU will continue trading as usual. Without a deal, the firm would have experienced higher costs for the products it sources in the European Union.
Sainsbury’s Share Price Technical Outlook
The daily chart shows that Sainsbury’s share price has been in a strong upward trend. It has gained more than 345% since September, making it one of the best-performing retailers. Also, the SBRY share price is generally above the 50-day and 100-day exponential moving averages while the RSI is approaching the overbought level of 70.
Therefore, in the near term, we believe that the shares will continue rising as bulls target the next resistance at 260p. On the flip side, a drop below 230p will invalidate this trend.