Inditex’s upside momentum losing steam

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.

Stocks (2)

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


More from Equities

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.