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Morrisons’ share price dropped by 1.64% on Thursday following news that the UK’s competition regulator will investigate its recent acquisition by the Clayton, Dubilier & Rice (CD&R) investment consortium.
The Competition and Markets Authority (CMA) has issued an initial enforcement order, requiring Morrisons to continue operating as an independent entity while the $9.7 billion acquisition by CD&R is under review. CD&R will not be able to take ownership of the company until the CMA approves the deal.
According to a Reuters report, the CMA could take up to 40 days from the start of the formal investigation to make a decision.
Currently, Morrisons’ share price is testing support at the 19.10 mark. If this level breaks, it could allow bears to push the price down toward the 18.52 level, which previously acted as resistance before the gap-up on August 2. Further support levels lie at 17.74 and 17.13.
Conversely, if the 19.14 support holds, bulls may aim for the 20.30 resistance level. Clearing this barrier could lead to new 2021 highs, with potential targets at the 127.2% Fibonacci extension level of 21.00 and the 141.4% extension level of 21.37.
It’s also possible that the price may remain range-bound between 19.14 and 20.30 until one of these levels is decisively broken.