Is this breakout a good trade for you?
Will Barratt Developments turn, or will it continue to break upwards beyond 475p?
- The chart shows the price action for Barratts since late November
- The shares have broken above a resistance zone at 475p to trade 484p.
- The ‘trend is your friend’. Will it continue?
- Shares -27.9% from 2018 highs; +10.9% from 2018 lows; +4.7% year-to-date
- 8 Jan: UK Halifax House Price data stronger than consensus
- 6 Dec: Liberum says hard Brexit priced in for UK house builders
- Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal
Trading Barratt Developments – An Example
Let’s say the breakout appeals to you, you think it’s likely to continue. You decide to buy exposure to £10,000 worth of Barratt Developments using a CFD, at the current price of 484p. To do this, you need £2,000.
Let’s assume Barratt Developments’s trend continues to 519p (7.2%). Your profit would be £720, from your initial investment of £2,000.
Conversely, let’s assume you open the above position, and place a stop-loss at 3% from the current price. Barratt Developments trend breaks down, falling 3% and it hits your stop-loss. Your loss would be £200.
This is provided for information purposes only. It should not be taken as a recommendation.