Pearson
Is this breakout a good trade for you?
Will Pearson turn, or will it continue to fall towards 769p?
- Breakdown below 898p to trade 880p (at time of writing).
- The ‘trend is your friend’. Will it continue down towards 769p?
- Shares -13.4% from 2019 highs; at 2019 lows; -6.1% year-to-date.
- 19 Feb: Deutsche says buyback hopes off table after K12 sale
- 18 Feb: Citi says Pearson’s K-12 sale pragmatic, but lacks short-term rewards
- Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal
Trading Pearson – An Example
Let’s say the breakdown appeals to you, you think it’s likely to continue to 769p . You decide to sell exposure to £10,000 worth of Pearson using a CFD, at the current price 880p (at time of writing). To do this, you need £2,000.
Let’s assume the Pearson trend continues down towards 769p (-12.6%). Your profit would be £1260, from your initial investment of £2,000.
Conversely, let’s assume you open the above position, and place a stop-loss at 4% from the current price. Pearson breaks higher, rising 4% and it hits your stop-loss. Your loss would be £400.
This is provided for information purposes only. It should not be taken as a recommendation.