Will Tesco break support, or will it rise again back to highs of 266p?

• Tesco has rising support since Dec 2016 and horizontal support since March 2018
• Now trading 204p (at time of writing).
• Will the pattern repeat, the shares climbing back towards 266p?
• Shares -23.0% from 2018 highs; +8.1% from 2018 lows; -2.5% year-to-date.
• 19 Nov: UK supermarkets confident government will step in to avoid food shortages in case of no-deal Brexit
• 4 Oct: Jefferies says Tesco’s Thailand shortfall can be recovered
• Tesco is the biggest UK Supermarket; just launched new discount Jack’s to compete with Lidl and Aldi
• Source: Bloomberg, FT, Reuters, DJ Newswires

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Trading Tesco – An Example

Let’s say you like the Tesco chart and you think the price is heading back towards 266p again. You decide to buy exposure to £10,000 worth of Tesco using a CFD, at the current price of 204p. To do this, you need £2,000.

Let’s assume Tesco rises back to 266p (+30.4%). Your profit would be £3040, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 5% from the current price. Tesco falls 5% and hits your stop-loss. Your loss would be £500.

This is provided for information purposes only. It should not be taken as a recommendation.