Grocery sales in the UK rose 6.5% in the four weeks leading to April 18 as vaccinated elderly shoppers are cleared to return to physical stores. According to market research firm Kantar, this period marked the busiest time for grocers in more than one year, with a 4% month-on-month increase in shopping visits.
Unfortunately, this is bad news for online grocery delivery company Ocado, which saw an upsurge in fortunes as locked-down consumers had to buy from online stores. But with the reopening of brick-and-mortar shopping stores, it would appear that investors are exiting the stock in droves.
Technical Outlook for Ocado
Ocado’s daily chart shows that price was only in an uptrend for the period the UK economy was in lockdown mode, which caused a shift in consumer shopping habits that profited the company. Once the lockdowns were gone, the price began to tank. Ocado is now in the second phase of a drop, which could take it to pre-pandemic levels.
With the break of the ascending channel completed, Ocado is is on the path to making a move for the 1995 support level. Below this point, 1898 (May 18 2020 low) is expected to become an additional target.
On the other hand, a bounce on the 1995 support could retest 2078 (July 3 2020 high and April 12 2021 low), with 2135 serving as an additional resistance level. 2200 is both a psychological resistance and a point where the price interacts with the channel’s lower border. These are all potential rally-selling points.
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