ASOS: Technical target heading towards 5,750p

ASOS (LON:ASC) had first mover advantage in its online retail space, and it looks as though in share price terms we shall be treated to more of the same over coming months.

It is usually the case that sharp broker target price hikes become the kiss of death for a stock, if not immediately, then after a few days. Hopefully, this will not prove to be the case with the latest hike for ASOS shares at Berenberg. They have come up with a 20% plus hike from 5,100p to 6,500p, which will no doubt lift the spirits of existing shareholders. The question is whether there is any technical backing for such a golden scenario?

Looking at the daily chart of the retailer one can see how it is possible to draw a rising trend channel from as long ago as the beginning of this year. The floor of the channel currently runs at 4,680p, which suggests that provided there is no break back below this level on a weekly close basis, we should be treated to further decent upside.

Just how high the stock could stretch is suggested by the 2016 resistance line projection pointing as high as 5,750p. This may be hit over the run up to Christmas/early New Year, as the market speculates on how well ASOS has fared in this key shopping period.