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Ocado Enters 2135 – 2247 Range As Earnings & Vaccines Impact on Price Awaited

Ocado Group will release its full-year results on Thursday. In November, the Ocado management announced that it expected its EBITDA to hit £60m, which is 50% better than its previous guidance. However, the stock could face some headwinds as the first set of UK coronavirus vaccinations could kick off this week. 

There are concerns that mass vaccination could allow for a lifting of restrictions, which could reduce online shopping and start to pressure the company’s revenue. This may not be obvious until after the holiday shopping season. 

Ocado benefitted heavily from the restrictions and lockdowns, as people who were stuck at home had to rely on online shopping and logistics companies to fill their grocery demand needs.

Fitch confirmed the B+ credit rating of Ocado last week, but this has not helped its stock price lift-off from recent lows. Ocado trades at 2205 currently, or 0.38% lower this Monday. 

Technical Levels to Watch

Recent price action has narrowed into a range that has 2247 as the ceiling and 2135 as the floor. A triangle consolidation area is starting to emerge. Consideration of the slump of 9 November, along with the price consolidation, gives the picture of a bearish pennant. 

A breakdown of the lower edge of the consolidation area provides a price projection that could go as low as 1898. This decline would have to take out 2135, 2078 and 1995 along the way.

On the flip side, a recovery bounce that forces Ocado’s share price above 2247 also invalidates the bearish expectation and puts 2360 within the buyers’ sights. 2440 and 2582 constitute additional targets to the north if the advance continues. This outlook would benefit from a stellar earnings result on Thursday.

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Ocado Daily Chart

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