Is this breakout a good trade for you?
Will Cairn Energy turn, or will it continue to rise to Feb highs of 215p (+24%)?
- Breakout above 168p to trade 173p (at time of writing).
- The ‘trend is your friend’. Will it continue towards 215p (+24%)?
- Shares -19.8% from 2019 highs; +21.3% from 2019 lows; +15.4% year-to-date.
- 17 May – Cairn says production on track to meet guidance
- Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal
Trading Cairn Energy – An Example
Let’s say the breakout appeals to you, you think it’s likely to continue to 215p . You decide to buy exposure to £10,000 worth of Cairn Energy using a CFD, at the current price 173p (at time of writing). To do this, you need £2,000.
Let’s assume the Cairn Energy trend continues upwards to 215p Feb highs (+24%). Your profit would be £2,400, 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. Cairn Energy breaks lower, falling 5% and it hits your stop-loss. Your loss would be £500.
This is provided for information purposes only. It should not be taken as a recommendation.