The Ocado share price bounced back in the final weeks of August as investors rushed to buy the dips. The OCDO stock rose from the monthly low of 1,1715p to the current 2,045p. This jump values the company at more than 15.38 billion pounds.
Ocado stock bounces back
Ocado is a fast-growing UK company that provides e-commerce solutions to companiies in several countries. The company has an e-commerce joint venture with Marks & Spencer, one of the leading UK retailers. Internationally, it offers warehousing and logistics solutions to key companies like Kroger.
The Ocado share price has retreated recently as investors predict that its demand will slow as more people shift to physical shopping. Indeed, the firm’s numbers released in August showed that its growth had slowed down. For example, its sales declined by 0.7% in the 12 weeks to 8th August.
This weak performance was offset by the strong performance of Marks & Spencer (MKS). The company said that it expects that its profit will be at the upper side of its 300 million and 350 million pounds target. Still, this is not all good news for Ocado since the company cited strong physical demand.
In September, Ocado will have a relatively muted month since the management will not publish any results. Still, focus will be on the Delta variant and whether the UK will encourage people to remain at home.
Also, investors will focus on how the company will address the criticism about low wages of its drivers, who are paid less than 5 pounds per hour. Additionally, the rising competition from other e-commerce players will be watched.
Ocado share price forecast
The daily chart shows that the Ocado share price made a strong recovery in August. Along the way, the stock managed to move above the upper side of the descending channel shown in purple. Recently, it seems like the stock has formed a break and retest pattern since it is approaching the upper side of the channel.
The stock has also moved above the 25-day and 15-day MAs. Therefore, the OCDO share price will likely keep rising in September as bulls target the key resistance level at 2,400p. However, a drop below 1,770p will invalidate the bullish view.