ASOS and the price of returning to sanity
Reprieved by the Covid online retail boom, shares have fallen rapidly since the pandemic ended. Independent analyst Alistair Strang investigates whether a recent rally is the start of a sustainable revival.
15th October 2024 07:16
by Alistair Strang from Trends and Targets
ASOS (LSE:ASC)'s share price seems to have been executing a “not to do” list of concepts as it has proven pretty foul since May 2023. On the bright side, when we previously reviewed this, we’d speculated on a potential bottom at 277p but encouragingly, the lowest it has fallen has been around 320p, perhaps implying some hidden strength in the share price.
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We can certainly wonder if their recent sale of TopShop shall justify some further growth in the share price. Alternately, of course, there’s the risk the Chinese giant Shein will close in as they invade the UK after eclipsing Boohoo.
Currently, it feels like some recovery potential is slowly becoming possible, movement above just 436p hopefully triggering recovery to an initial 530p with our secondary, if bettered, an amazing (and thus, unlikely) looking 573p.
Should things intend to behave like our Monday, below 411p threatens weakness to an initial 394p with our secondary, if broken at 385p. We would really hope for a bounce before the 385p level as the share price, from a Big Picture argument, cannot afford to experiment below such.
Source: Trends and Targets. Past performance is not a guide to future performance.
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
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