What warehouse strikes mean for Woolworths share price
Woolworths is grappling with a perfect storm-strikes at its distribution centres have caused empty shelves, frustrated shoppers, and a jaw-dropping $50 million sales hit.
Workers are demanding safer conditions and better pay, while negotiations with the United Workers Union (UWU) remain at a standstill. For investors looking to take advantage of negative news, this chaos might scream "buy in the dip!"-but is it really time to make your move?
The supply chain disruptions across Victoria, New South Wales, and the ACT have left Woolworths scrambling. Beyond the immediate crisis, these labour disputes raise concerns about long-term risks: reputational damage and rising operational costs.
Yet, Woolworths' history of resilience-from navigating the pandemic to overcoming past challenges-shows its ability to bounce back. Still, in the stock market, timing is everything.
Turning to the share price, Woolworths has been in a steady decline since reaching its peak of $42.66 in August 2021.
The recent break below the critical $32 support level - historically a strong foundation for upward price movements-raises concerns about further downside. With the stock showing no signs of stabilising, attention now turns to historical support zones at $26 and $21.
Given this, patience is the best play right now until Woolworths finally finds its footing. If buyers
emerge around key support levels, then the recovery could offer an outstanding buying opportunity. But for now, investors should keep their powder dry and wait for signs of a confirmed turnaround before taking the plunge.
What are the best and worst-performing sectors this week?
The best-performing sectors include Consumer Discretionary and Information Technology, up more than 2%, followed by Consumer Staples, up more than 1%.
The worst-performing sectors include Real Estate, down more than 2%, followed by Utilities, down more than 1% and Financials, slightly up under half a per cent.
The best-performing stocks in the ASX top 100 include Block Inc, up more than 10%, followed by AMP Limited and Pro Medicus, both up more than 6%.
The worst-performing stocks include Northern Star, down more than 5%, followed by Goodman Group and Charter Hall Group, both down more than 4%.
What's next for the Australian stock market?
The All-Ordinaries Index climbed to a new all-time high this week, gaining more than half a percent and showcasing sustained buyer confidence. However, short-term signs of a slowdown are beginning to surface. Let's break it down.
The index has achieved new highs in four of the past five weeks, but the momentum behind these gains seems to be waning. For instance, in the week ending November 22, the All Ords posted a weekly range of more than 2%. The following week, this range narrowed to around 1.5%, and so far, this week, it has dipped below 1%.
This deceleration in momentum and volatility suggests the market may be gearing up for a pullback.
Adding to the complexity is December's historical trend of strong market performance. Therefore, one plausible outcome could see the index retreat to around 8500 points over the next couple of weeks before rebounding in late December, to close the month in positive territory.
So, if you're not already holding positions, this week and next might not offer the best opportunities from a risk-reward perspective. Exercising patience could open the door to a favourable entry point before the year ends.
Still, it's essential to focus on individual stocks rather than relying solely on the index, which reflects overall market sentiment but doesn't necessarily predict the performance of specific shares.
Zooming back out, buyers have dominated the market in 2024, and there's little right now to suggest this trend won't continue as we move into 2025. Therefore, keep watching for new buying opportunities to ride the bull market until sellers decide to finally come to the party.
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