Is this breakout a good trade for you?
Will Rolls Royce turn, or will it continue to rise beyond 997p?
- The chart shows price action for Rolls Royce since mid-July.
- The shares have broken above falling highs resistance trendline at 832p to trade 856p (at time of writing).
- The ‘trend is your friend’. Will it continue?
- 24 Dec: Norwegian Air and Rolls-Royce reached a deal over engine issues.
- 12 Dec: Engine maker upgraded its 2018 guidance to top of its earlier range.
- Shares -3.2% from 2018 highs; +2.7% from 2018 lows; +3.2% year-to-date.
- Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal
Trading Rolls Royce – An Example
Let’s say the breakout appeals to you, you think it’s likely to continue to . You decide to buy exposure to £10,000 worth of Rolls Royce using a CFD, at the current price 856p (at time of writing). To do this, you need £2,000.
Let’s assume the Rolls Royce trend continues upwards to 997p (+16.5%). Your profit would be £1650, from your initial investment of £2,000.
Conversely, let’s assume you open the above position, and place a stop-loss at 7% from the current price. Rolls Royce breaks lower, falling 7% and it hits your stop-loss. Your loss would be £700.
This is provided for information purposes only. It should not be taken as a recommendation.