ASOS exploring the lows of fashion?
14th June 2023 07:44
by Alistair Strang from Trends and Targets
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The online fashion retailer has been making headlines recently, but the share price has fallen further. Independent analyst Alistair Strang gives his forecast.
When we previously reviewed ASOS (LSE:ASC) a year ago we’d given quite a dire prediction, with movement below 775p looking capable of a visit to 592p with secondary, if broken, an eventual bottom of a silly looking 90p.
Now, from reading the gossip columns in the financial press, it appears others may be raising an eyebrow at the share price of this fallen star of the fashion world.
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Mr Ashley and his Frasers Group (LSE:FRAS) have now apparently increased their share holding to just under 10% of the equity, challenging another couple of guys who believe they are capable of turning the company around from within.
No matter what, ASOS appears to be living in interesting times and while we’re no longer pointing to 90p as a potential bottom, it currently appears weakness below just 322p threatens ongoing reversal to 277p, a price level not witnessed since 2009. If broken, our secondary and ultimate bottom now calculates down at an eventual 139p, hopefully with a bounce.
Of course, there is always the question, will people continue purchasing online if they can once again make terrible fashion decisions in stores?
If any bounce is to prove valid, it currently calculates above 412p should tick the first box for viable recovery, pointing at the potential of recovery to an initial 443p with secondary, if exceeded, working out a 589p. This secondary should prove important, allowing the share price the opportunity to eventually close above Red on the chart (presently 498p) and offer great things for the future.
Unfortunately, it’s easy to believe a “bottom” shall occur anywhere between current and 277p if a battle between giants kicks off for the perceived value of this fashion retailer.
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.
Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea.