Jump to content

ASOS share price firmly under pressure ahead of trading statement

Recommended Posts

ASOS shares are on the back foot again, as the gloomy outlook for consumer spending continues to pressure the share price.

bg%20asos%20987987987.pngSource: Bloomberg
 Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 12 July 2022 

ASOS hits 12-year lows

It has been a miserable 18-months for ASOS shareholders.

The big rally from the depths of the pandemic finally petered out early in 2021, as questions over the outlook for such stocks began to take hold.

In addition, inflows shifted away from the pandemic’s winners like ASOS towards those believed to be more likely to benefit from the renewed economic expansion and rising commodity prices.

Markets focus on expectations of future earnings, and for ASOS the picture has become increasingly gloomy. The above-mentioned rise in commodity prices has meant a surge in inflation readings globally, and a consequent response by central banks, which have tightened policy in order to try and slow the rise in prices.

This has resulted in a squeeze on consumer incomes, pressuring stocks like ASOS. Customers have been returning more items in this straitened climate, something that has also affected rival, BooHoo. Having benefited from the strong level of online spending in its core market of 20-year olds, the firm is now feeling the pressure as this demographic is particularly hard-hit by rising prices.

Brokers have been cutting estimates for full-year performance, causing the shares to decline further. For the time being, it looks like this gloomy outlook will persist.

ASOS share price – technical analysis

The share price has dropped by around 80% since last May, moving from around £50 to sub-£10 now, in a fairly relentless move that has seen few sustained rebounds.

The June rebound faltered as it returned to £10, and we have seen the share price fall again over the past two sessions. Additional declines seem set to target the lows from June at £7.72, with the next big level below this down at £5.19.

ASOS_120722.pngSource: ProRealTime
Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 29/01/23 11:39
  • Posts

    • Does anybody know the BIL (SPDR Bloomberg 1-3 Month T-Bill ETF) equivalent with a GBP currency hedge? I want the interest yield but I don't want the currency risk.
    • Capital, win loss ratio. If you have a trading edge and you can consistently win 50% of your trades, so your winning 5 trades out of 10. So if your risking 1% of your capital per trade, out of your 10 trades 5 would be losers, so that’s 5% loss and realistically out of the 5 winning trades, some would make small profits, some break even and 1, 2 or 3 could run nicely IF you can let your profits run, basically your making money out of 2 trades out of the 10 trades (80/20 Rule Pareto principle) So a $20,000 acct risking 1% is $200 per trade, this will keep the trader with his trade risk based on being able to win 50% of his trades. A long term trend trader can win with 30% wining trade. Basically you need to know your numbers. Rgds Pete
    • Investing in stocks can be a great way to grow your wealth over time. However, there are different approaches that investors can take when choosing which stocks to buy. Two of the most popular approaches are growth investing and value investing. Growth Investing Growth investing is an investment strategy that focuses on buying stocks of companies that are expected to grow at a faster rate than the overall market. These companies are often in industries that are growing quickly, such as technology or healthcare. Investors who use this approach believe that these companies will be able to generate higher profits in the future, which will lead to higher stock prices. One of the main advantages of growth investing is that it can potentially provide higher returns than the overall market. However, it is also riskier than other investment strategies, as these companies often have higher valuations and more volatile stock prices. Value Investing Value investing is an investment strategy that focuses on buying stocks of companies that are undervalued by the market. These companies may be in industries that are out of favour or have recently experienced challenges, but they have strong fundamentals and a history of profitability. Investors who use this approach believe that these companies are undervalued and that their true value will be recognized in the future, leading to higher stock prices. One of the main advantages of value investing is that it can potentially provide lower risk than growth investing. However, it may also provide lower returns in the long run, as these companies may not have the same growth potential as companies in the growth investing category. Comparing Growth and Value Investing Growth and value investing are two different approaches to stock investing, each with its own advantages and disadvantages. Growth investing can potentially provide higher returns but is riskier, while value investing can provide lower risk but potentially lower returns. An investor may choose one approach or a combination of both. A portfolio that contains a mix of growth and value stocks can provide a balance of potential returns and risk. Conclusion Both growth investing and value investing can be effective ways to invest in stocks. The key is to understand the potential risks and rewards of each approach and to choose the one that aligns with your investment goals and risk tolerance. Analyst Peter Mathers TradingLounge™ 
  • Create New...