Is this trend a good trading opportunity?
Will Diageo turn, or will it maintain momentum to new record highs?
- Shares +12% since late Jan; trading new all-time highs.
- Shares rally after news of strong results and a £3bn share buyback (31 Jan)
- Now trading 3013p (at the time of writing).
- Will the positive momentum continue towards new record highs at 3300p?
- Shares trading at 2019 highs; +10.9% from 2019 lows; +7.7% year-to-date.
- Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal
Trading Diageo – 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 Diageo using a CFD, at the current price of 3013p. To do this, you need £2,000.
Let’s assume Diageo trend continues beyond 3013p record highs to reach 3300p (+9.5%). Your profit would be £950, from your initial investment of £2,000.
Conversely, let’s assume you open the above position, and place a stop-loss at 3% below the current price. Diageo falls 3% and hits your stop-loss. Your loss would be £300.
This is provided for information purposes only. It should not be taken as a recommendation.