The Boohoo Group PLC (LON: BOO) share price has fallen 33.75% over the past six months as investor sentiment towards the fashion industry remains muted. The fast fashion retailer’s share price is now trading near a significant long-term support level that has been in place since September 2022.
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.
The fashion retailer has been dealing with multiple headwinds, including the high cost of living in the UK and abroad, which has reduced the amount people spend on fashion items. The company is also dealing with a rising percentage of product returns as consumers become more cautious about spending their money.
Top Broker Recommendation
- BlackBull 26,000+ Shares, Options, ETFs, Bonds, and other underlying assets – Read our Review
- Admiral Markets More than 4500 stocks & over 200 ETFs available to invest in – Read our Review
- Hargreaves Lansdown The company's website is easily understandable and accessible to a wide range of customers – Read our Review
- eToro Wide range of instruments available to trade – Read our Review
- IG Top-tier regulation – Read our Review
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY
The retailer is also dealing with increasing competition from Shein, a Chinese e-commerce store with cheaper products and more variety than Boohoo. Shein has taken the global fast fashion industry by storm and continues to attract young consumers to its website.
However, there are concerns that Shein uses sweatshop labour, which might work to Boohoo’s advantage as the company has provided greater transparency about its supply chain since the Leicester City sweatshop labour scandal.
Looking at the technical picture, we can see that Boohoo’s share price is almost at the long-term support level, where it could either bounce and rally higher or break below it and keep heading lower. It is hard to tell what the stock will do, but the two scenarios could play out.
As traders, we must react to market movements, wait for the bounce, or move higher before buying. We could also wait for the support level to break and short Boohoo stock. The critical idea is to ensure we are reacting and not predicting future prices.
The next few days and weeks are crucial for Boohoo investors since the price will let us know where it wants to go so that we can follow up with the correct trades. Meanwhile, we can watch for any news releases from the company that could be the catalysts for future price movements.
A negative announcement could lead to a decline in Boohoo stock, and a positive one could trigger a rally in Boohoo shares.
The Boohoo share price.
The Boohoo share price has fallen 33.75% in the past six months. What’s next for the fast fashion retailer?
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.
