- AO stock price has shown a recent uptrend after being push down by bears at the resistance level
- The company is on the verge of becoming net profit positive; what is the effect of this on the share price?
- The stock has taken support from its 50-day EMA; find out what’s next.
AO World’s stock experienced a robust bullish rally in response to the company’s achievement of turning pretax positive, despite incurring a net loss of just -£2.6 million. This remarkable turnaround signifies an impressive growth rate of over 91% compared to the previous year’s net loss of -£20.4 million.
However, it’s worth noting that AO World encountered challenges in its customer segment due to strategic decisions. Such as discontinuing sales through non-core channels. And ending the practice of selling products at a loss.
Despite these obstacles, the company’s optimism remains evident through its press reports. AO World has expressed its confidence in its future outlook, highlighting its potential to enhance its adjusted EBITDA margin by 5% within the short term.
This positive sentiment is mirror in the stock price, which has sustained a consistent bullish trend since the company’s achievements, triumphing over previous price rejections and maintaining an upward trajectory.
Technical Analysis of AO World
At the time of writing, AO stock price has broken multiple resistances and has just bounced back from its immediate resistance. The stock price is currently moving within a range surrounded by various supports and resistances, with the indicators offering valuable insights into the near future.
Support: The first and immediate support level is at £80.25 which is the recently broken resistance of the past. The second support level is at £67.35.
Resistance: The first resistance is at the level of £98.25. Where AO World price has just faced a rejection from the bears. This is followed by the second resistance at £106.9.
MACD: The MACD chart is above its neutral zero level. The signal line has crossed the MACD line to come on top, which indicates a weak pricing strength in recent times. The MACD and Signal lines are at the levels of 0.9399 and 1.62 respectively.
RSI: The RSI chart is also seen declining towards its neutral territory after its SMA touched the level of 70. The RSI is currently at 52 and is below its SMA line, which is at 54. This is indicative of a downtrend.
EMAs: The 50-day EMA has just given support to bulls as AO World Price is looking to bounce back from it. Currently, at the level of £87.20, the 50 EMA has crossed the 200 EMA which is at the level of £75.6.
Conclusion
The price forecast for AO stock leans toward a possible bullish trend. A strong argument in favor of this prediction is the behavior of the price with its 50 EMA. As we have seen above, and this is further support by the RSI graph as the SMA and RSI have met for a possible bullish crossover. A potential selling level for AO World’s stock would be below the first resistance level. And also if the stock price falls below its EMAs.
Technical levels
Support: £80.25, £67.35
Resistance: £98.25, £106.9
RSI: 54
50 EMA: £87.20
200 EMA: £75.65
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
