Zip Share Price Makes New All-Time High on Partnership News (ASX:Z1P)

Zip Co Ltd [ASX:Z1P], one of the leaders in the ‘buy now, pay later’ sector (BNPL), has hit a new all-time high.

The Zip share price is trading at $8.09 at the time of writing.

Zip made the announcement of a new partnership with the global brand, eBay.

ASX ZIP Share Price Chart - Z1P Shares

Source: Optuma

What’s happening at Zip?

Being one of the leaders in the BNPL sector, the COVID-19 pandemic has come as a blessing in disguise for Z1P and the sector overall.

With so many people being forced to stay home, a lot of them have also turned to shopping online and using the easy payment options provided by BNPL companies.

A lot of companies now are using Z1P’s platform or that offered by Afterpay Ltd [ASX:APT]. Both are easy to use, have nice mobile apps, and let customers pay in instalments for the goods they want to buy.

This brought a dramatic boost in share price to both companies which, in turn, is seeing their partnerships and consumer base expand rapidly.

The most recent announcement for Z1P is the launch of a big partnership with eBay.

This will offer its 40,000 Australian small- and medium-sized businesses the opportunity to access working capital via the eBay marketplace.

Peter Gray, Co-founder and Chief Operating Officer, said:

Zip is extremely excited to formally launch its Zip Business platform to create a suite of products for the small business community, a segment that has been underserved by the traditional lenders in recent years.

Where to from here for Zip Shares?

This should please most, with small businesses now able to cover short-term expenses such as marketing campaigns (and manage their cashflows) via access to flexible lines of credit.

But in my opinion this news should be tempered with the fact we are still going through COVID-19.

Business conditions are not normal right now and there seems to be a heavy and growing reliance on tech stocks carrying the market.

Think of the tech bubble in the early 2000s.

Is this one going to burst as well?

Let’s look at the Z1P share price chart:

ASX Z1P Share Price Chart 2

Source: Optuma

Z1P’s share price largely moved sideways for the last few weeks and has shown some volatility with large weekly price swings, indicating the bulls and bears haven’t settled on a move.

With the Z1P share price now just above the support level of $7.90, if it continues up, then the level of $8.50 could become the focus.

If a retracement unfolds, then it could be looking at the $7.00 level, which was around the all-time high price set back in June.

Stocks sometimes tend to fall back and ‘fill the gap’ that may have been created in a speedy rise.

In relation to the Zip Co. share price there was a gap created between $3.50 and $5.00 in the recent run up — if a major decline does unfold this may be a spot to watch in future.


Carl Wittkopp,
For Money Morning

PS: Z1P started off small. Learn about four well-positioned small-cap stocks: These innovative Aussie companies are well-placed to capitalise on post-lockdown megatrends. Download now.

Carl Wittkopp writes for Money Morning and has a diploma in Financial Planning. He specialises in technical analysis.

Money Morning Australia