Jump to content

Ocado share price close to major support ahead of Q1 trading statement

Recommended Posts

Ocado is looking for support above the 1,000p mark as it signs a deal with Auchan in Poland, drops “best before” labels on some UK fruit and vegetables and enters a court battle over a patent infringement dispute with Autosave.

bg_ocado_689798.JPGSource: Bloomberg
 Axel Rudolph | Market Analyst, London | Publication date: Tuesday 15 March 2022 

Online grocery business, Ocado has signed an exclusive deal with Auchan to build a fulfilment centre in Poland to serve the Warsaw area by 2024 with the French supermarket giant allowed to use its technology across Auchan stores in the country, having already made a similar deal with the company’s Alcampo brand in Spain last year.

Under the terms of the deal, Ocado will be paid certain fees upfront from Auchan Poland during the construction of the Warsaw warehouse with ongoing fees after completion being linked to criteria such as sales targets.

This week Ocado also announced that it intends to axe “best before” labels on some fruit and vegetables in the UK in an effort to reduce food waste.

Meanwhile the UK-listed firm is going to the High Court in London with the Norwegian robotics firm, Autostore over a patent infringement dispute. The two innovative companies are facing off in multiple jurisdictions around the world to protect their intellectual property in warehouse storage technology. Ocado, like its competitor Autostore, licences its technology and uses it for its British grocery delivery service.

The UK grocery company scored a significant win when it won the latest round of litigation in the United States, where the International Trade Commission affirmed a December ruling that Autostore’s patent claims against Ocado were either invalid or not infringed. The Norwegian pioneering company plans to appeal the ruling in the US Court of Appeals, though.

On Thursday, Ocado will publish its first quarter (Q1) trading statement which is expected to have an impact on the company’s share price which last week managed to hold marginally above key long-term technical support, having previously slipped by over 60% from its February 2021 peak.

15032022_OCDO-Weekly.pngSource: ProRealTime


This major technical support zone is comprised of the November 2019, February and March 2020 lows at 1,054 to 996 pence.

Provided that it continues to underpin, a retest of the November to March downtrend line is on the cards since the current March low at 1,061 has been accompanied by positive divergence on the daily RSI.

Last week it thwarted an attempt of a rally at 1,322 pence.

15032022_OCDO-Daily.pngSource: ProRealTime


The next higher early March high at 1,390 will need to be exceeded, for a bottom to be formed and for the key 1,546p to 1,626p resistance area to be reached. It contains the October, December lows and the late January-to-February highs and as such should prove to be difficult to overcome, if reached at all.

Failure at major support at 996p would engage the October 2018 low at 731p.

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
  • Posts

    • Sainsburys full year earnings and Unilever’s first quarter trading update both say the same thing, UK consumers are in for higher prices. The war in Ukraine, supply chain issues and the effects of ongoing Covid all to blame.      
    • US Dollar (DXY) Daily Price and Analysis US Q1 GDP may stall the greenback’s advance. A 20-year high nears for the US dollar. The multi-month US dollar rally continues with the greenback printing a fresh high today ahead of the first look at US Q1 GDP at 12.30 GMT. The US dollar basket (DXY) has been boosted by renewed weakness in the Euro and the Japanese Yen, as investors move from lower-yielding to higher-yielding currencies, while safe-haven flows continue to benefit the greenback. The US growth release later in the session is expected to show a sharp slowdown from the robust Q4 figure of 6.9%. The markets are currently pricing in growth of just 1% for the first three months of this year, with the slowdown mainly due to a reduction in inventory accrual over the quarter. This release is unlikely to move the greenback, unless there is a large miss or beat, as the Fed believe that 2022 US growth will be robust enough to let them tighten monetary policy sharply without damaging the economy. The latest US Core PCE data – the Fed’s preferred inflation reading – is released on Friday and this may have more effect on the US dollar than today’s GDP data. For all market moving economic data and events, see the DailyFX Calendar. The ongoing US dollar rally has been aided by weakness across a range of G7 currencies including the Euro, the Japanese Yen, and the British Pound. The Euro continues to battle with lowly growth expectations, exacerbated by energy concerns, the British Pound is mired by weak economic data, while the Japanese Yen is in freefall as the BoJ continues with its ultra-loose monetary policy.   The US dollar continues to press higher and looks set to break above 103.96, the March 2020 high. Above here the US dollar would be back at levels last seen nearly two decades ago. The March resistance will likely hold in the short-term, especially with month-end portfolio rebalancing at the end of the week, but US dollar strength is set to continue in the months ahead. USDOLLAR (DXY) WEEKLY PRICE CHART – APRIL 28, 2022 {{THE_FUNDAMENTALS_OF_BREAKOUT_TRADING}} What is your view on the US Dollar – bullish or bearish?   Apr 28, 2022 | DailyFX Nick Cawley, Strategist
    • While Tesla has nothing directly to do with Elon Musk buying Twitter - TSLA stock closed down 12% on news that Musk may have to sell stock and use other holdings to stand against the loan to finalise the purchase of the social media giant.        
  • Create New...