Is this trend a good trading opportunity?
Will Cairn Energy turn, or will it continue to rise towards 237p Oct highs?
- Cairn shares are +46% since Christmas.
- Now trading at 200p (at the time of writing)
- Will the strong positive momentum continue?
- Shares -0.6% from 2018 highs; +37% from 2018 lows; +33.5% year-to-date.
- 22 Jan: 2018 production update beats expectations
- Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal
Trading Cairn Energy – An Example
Let’s say the trend appeals to you, you think it’s likely to continue. You decide to buy exposure to £10,000 worth of Cairn using a CFD, at the current price of 200p. To do this, you need £2,000.
Let’s assume the Cairn trend continues to 237p Oct highs (+18.5%). Your profit would be £1850, from your initial investment of £2,000.
Conversely, let’s assume you open the above position, and place a stop-loss at 6% from the current price. Cairn falls 6% and hits your stop-loss. Your loss would be £600.
This is provided for information purposes only. It should not be taken as a recommendation.