Marks & Spencer share price crosses key level ahead of layoffs

Marks & Spencer (LON: MKS) share price has been in a strong recovery phase in 2023. The stock jumped to a high of 165.50p on Friday, the highest point since April 2022. This means that they are approaching their 52-week high. The shares have risen by 86% from their lowest level in 2022.

Layoffs upcoming

Marks and Spencer stock price continued rallying last week after Ocado, its joint venture partner, published encouraging results. The company’s retail business saw its revenue come in at 584 million pounds, which was better than analysts’ estimates.

Marks & Spencer shares will be in the spotlight on Monday after reports that it is planning to lay off hundreds of workers at the headquarters. The layoffs news was first reported by the Sunday Times. In a response to Bloomberg, a spokesperson said that the report was inaccurate. 

M&S has been implementing a turnaround strategy for years as it faces strong competition in the UK. This strategy includes boosting its profitability, growing its market share, and increasing its online sales. 

The results are a bit mixed for now. In November, the company said that its profit before tax came in at £205.5 million, down from £269 million in the previous month. Ocado Retail had a loss of £7 million after making a profit of £28.7 million in the same period a year earlier.

Marks & Spencer, like other British retailers, is going through a difficult period. UK’s inflation remains at an elevated level, which is seeing more people reduce their basket sizes. This trend is being offset by the rising consumer confidence, which has risen to the highest point in months. The company is also facing significant competition across all its categories. 

Marks & Spencer share price forecast

MKS chart by TradingView

The daily chart shows that the MKS stock price has been in a strong bullish trend in the past few months. And last week, the stock hit the important resistance point at 167.25p, the highest point on February 3. It has also formed a golden cross, which happens when the 200-day and 50-day moving averages make a bullish crossover pattern.

The Relative Strength Index (RSI) is nearing the overbought level. It has also formed an inverted head and shoulders pattern. Therefore, there is a likelihood that the stock will continue its recovery in the coming weeks as buyers target the key level at 200p.