It is dangerous to do a purely technical analysis like this though, the possibility of a reverse head and shoulders here is small as the results have been very strong. A return to 167 is not on the cards IMO. Have you opened a short position?
Divit_R
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@MattOnly, I completely agree that it is dangerous to randomly predict an inverse head and shoulders out of thin-air - I have done this to indicate to my friend, that if a higher low is created, there is a chance of a reversal being formed.(also, widening bottoms in price action signifies price stabilisation and some-what equal weighted sentiment in an instrument - IH&S is 3 staggered bottom price-points) The chart was made for a friend of mine who has invested heavily in Boo-Hoo stock (long position) at quite a high price. This chart highlights support and resistance levels just to make the chart easier to understand for my friend. (My friend is not a trader, but simply a speculator with more money than common sense)
- Ideally, for this stock to go higher, it would require a great earnings report or some other fundamental news to attract more investment into it, thus raising the price.
- No, I have no positions on this stock
As for the return to 167, this is simply a prediction on my part - I assume the stock would create a local high, consolidate, and then revisit the new resistance created to either test or surpass it. (Look at RSI Chart text)
I was asked for an exit strategy for this stock while my friend was in a losing position, I told him to ditch the stock and take a loss if it declined past £1.40 per share of Boo-Hoo stock.
-Divit-
MattOnly
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@Divit_R, OK Divit, a fair reply. You are right that the RSI has moved too high, though the current consolidation looks to be bringing it back within the range. I think most people agree 220 is the biggest testing point (beyond the current 200 at the very least) , if it breaches this then your friend could be in profit even with an expensive position.
Interim results due in June (12th I believe) which will be a big decider.
To put him at ease I would mention that this include the effect of the heatwaves recently, the positive report recently from Next, and also the Beast from the East sales which happened mostly around Boohoo year end, but I think predominantly afterwards.