Inditex’s upside momentum losing steam
Nicolas Suiffet June 10, 2020 3:24 PM
Inditex, the Spanish clothing company, announced that it swung to a 1Q net loss of 409 million euros from a net profit of 734 million euros in the prior-year period.
Inditex, the Spanish clothing company, announced that it swung to a 1Q net loss of 409 million euros from a net profit of 734 million euros in the prior-year period and EBIT loss amounted to 508 million euros, compared with an EBIT of 980 million euros previously.
Also, net sales were down 44.3% on year to 3.30 billion euros. In addition, the company said: "Sales trends began to improve in May, though they are not yet at normal levels.
As of 8 June, 5,743 stores (78% of total) were open in 79 markets. Store & Online sales in local currencies in May decreased 51%. Store & Online sales in local currency from 2 June to 8 June decreased 34%."
From a technical perspective, the bullish momentum is fading as a rising wedge pattern (reversal pattern) is taking shape (not yet validated). The 20-week simple moving average is still heading downward.
Neutral view between 24.5E and 27.2E. A break below 24.5E would deliver a bearish signal (validation of the rising wedge) and would call for a drop toward 21.5E and 18.5E. Alternatively, a push above 27.2E would call for a new up leg towards 30E.
Source: GAIN Capital, TradingView
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.
Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.