Chart of the Day: Ocado

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Chart of the Day: Ocado

Ocado (OCDO): Amazon on the Horizon

One of the best business stories of late, which has received blanket coverage, was that of Amazon (NASDAQ:AMZN) entering the online supermarket space. Ordinarily this would have been bad for all companies doing anything in this area. But for the UK’s Ocado it must surely be the nightmare scenario. True, this group could be spun as being a supply chain technology provider, rather than a grocer; but really, most of us would acknowledge that for Ocado we are looking at the equivalent of a meteorite on the horizon at the end of the Jurassic. The company may be able to regroup. However, the fact that it has struggled to turn a profit over much of the past decade really underlines that for a difficult mini sector, things have now turned into mission impossible.

The charting position says it all, with the loss of the May support at 250p implying that at least while below this old support level, we run the risk of a move down to the floor of a March descending price channel at 200p. The timeframe on such a move could be as soon as the next 4-6 weeks.

Ocado chart

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