Trend channel target through 200p

1 mins. to read Trend channel target through 200p

With the recent story of (LON:BOO) it appears clear that there is little point being a High Street general retailer, paying business rates and of course the minimum wage.

Perhaps the first and most obvious thing to say about fashion retailer Boohoo is that the company is a poster child for the merits of an online only offering, and being a niche player/brand. It also avoids all the headaches of trying to attract footfall, paying business rates, and finding operatives who are talented enough to work in a shop. This clearly gives the company a distinct advantage over the likes of Next (LON:NXT), M&S (LON:MKS), but apparently not yet Primark. We shall see.

As far as the charting position is concerned it is evident that the stock has been something of a gift to technical analysts. This is because all the way up we have been treated to a relatively non volatile progression higher. The ascent has occurred within a rising trend channel which one can draw in from as long ago as June last year. The floor of the channel is currently running at the 20 day moving average level of 161p. Above this one can target at least 200p over the next 1-2 months at the 2016 resistance line projection. At this stage only well below the 50 day moving average at 150p would even begin to suggest a lasting bear episode was on its way.

BOO chart

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