ASOS share price stumbles back to its lows ahead of trading statement
There’s still no sign of a turnaround at ASOS, with the share price drifting back to the lows of summer 2023.
ASOS share price stumbles back to its lows ahead of trading statement
There’s still no sign of a turnaround at ASOS, with the share price drifting back to the lows of summer 2023.
It’s hard to exaggerate the decline of ASOS. For a while, it looked like the next FTSE 350 titan. A stunning international success that had delivered incredible returns for shareholders.
The problems began before the pandemic, with the shares slumping from their 2018 high of more than £78 per share to low just below £10 as Covid-19 hit. Lockdowns provided a respite, and lifted the shares dramatically, but this proved to be a short-lived development.
Since early 2021 the shares have been on a relentless downtrend, and after a brief revival in the summer of 2023 have now slipped back below 400p.
Pre-tax losses have ballooned, while the company has become the target of short-sellers, who have unsurprisingly seized on the 89% decline over the past five years. Many investors now seem to hope that ASOS will be taken over, something that would at least see the shares given a boost.
Technical analysis on ASOS share price
The ASOS share price, down over 15% year-to-date, continues to slide with the June and July lows at 323.0p to 320.3p remaining in sight as long as no unexpected bullish reversal takes the ASOS share price above its February high at 414.2p.
ASOS Weekly Candlestick Chart
A fall through the 323.0p to 320.3p support zone would push the psychological 300p mark to the fore. Resistance above the 344.4p October low comes in between the August-to-September 2023 lows and January trough at 357.0p to 360.9p lows.
ASOS Daily Candlestick Chart
For any kind of even short-term bullish reversal to become remotely possible, the 2023-to-2024 downtrend line at 358.7p will need to be bettered in the first instance. Further up meander the 55-day simple moving average (SMA) at 368.7p and the 200-day SMA at 386.8p which would both need to be exceeded on a daily chart closing basis as well.
Only then could another attempt at reaching the December peak at 450.0p be made.
For a long-term technical bottoming formation to be formed a rise and weekly chart close above the September high at 474.20p would need to be seen, something which currently looks pretty unlikely.
Analysts recommendations and IG sentiment
Fundamental analysts are rating ASOS as a ‘hold’ with Refinitiv data showing 1 strong buy, 2 buy, 13 hold, 6 sell and 1 strong sell - with the mean of estimates suggesting a long-term price target of 385 pence for the share, roughly 13% above the share’s current price (as of 25 March 2024).
IG sentiment data shows that 97% of clients with open positions on the share (as of 25 March 2024) expect the price to rise over the near term, while only 3% of clients expect the price to fall. Trading activity of IG’s clients this month shows 65% of buys.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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