The Boohoo share price is in the spotlight as the market reacts to the latest strong earnings by the company. The BOO stock is trading at 326p, which is higher than the intraday low of 304p.
What happened: Boohoo is an embattled fast-fashion company that has faced criticism for its treatment of workers in Leicester. However, this criticism did not stop the company from doing relatively well in its full year. Indeed, its core earnings rose by 37% during the year.
It made an EBITDA of more than 173.6 million pounds, which was better than the expected 171.3 million pounds. It also boosted its forward guidance, saying that it expects its revenue to jump by 25% in the new year. This will be primarily because of the new brands it recently acquired from Debenhams.
Still, like all companies that have benefited from the pandemic, there are concerns about whether the company will be able to maintain this growth after the pandemic ends.
Boohoo share price forecast
The daily chart shows that the Boohoo share price has been in a tight range recently. It has remained between the support and resistance levels at 311p and 366p, respectively. Today, the stock tested the lower side of this channel and then quickly bounced back. The shares also seem to have formed a double-bottom pattern, which is usually a bullish sign. At the same time, it seems like it has formed a small head and shoulders pattern, which is a bearish signal.
Therefore, I suspect that the head and shoulders pattern will prevail. This will be confirmed if the shares manage to move below 300p. If this happens, the shares may keep falling to 280p, which was the lowest level on November 24. However, this prediction will be invalidated if the BOO share price moves above the right shoulder at 345p.
Please don’t consider this investment advice. Views expressed here are those of the writer and the writer and InvestingCube will not be held liable for any losses.
BOO share price chart
Follow Crispus on Twitter.
Awarded and global FX/CFD broker. Well-regulated in multiple jurisdictions. Offers great spreads and liquidity for FX, Indices, and Commodities trading.
Cryptocurrency exchange with over 150 coins. As of Jan 18, Binance was the world's largest cryptocurrency exchange per volume.