Is this trend a good trading opportunity?
Will Pennon turn, or will it continue beyond 815p summer high?
- The chart shows the Pennon price action since late April.
- Shares in a monthlong uptrend from 686p October lows; now at 775p.
- Shares -5.84% from 2018 highs; +32.84% from 2018 lows; -1% year-to-date.
- In latest trading update (24 Sept), the water utility company said it’s on track to meet FY revenue expectations.
- The shares have risen by 8.4% in the past 5 weeks. Will this momentum continue?
- Source: Bloomberg, FT, Reuters, DJ Newswires
Trading Pennon – 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 Pennon using a CFD, at the current price of 775p. To do this, you need £2,000.
Let’s assume Pennon trend continues to the 815p summer high (+5.1%). Your profit would be £510, from your initial investment of £2,000.
Conversely, let’s assume you open the above position, and place a stop-loss at 2% from the current price. Pennon falls 2% and hits your stop-loss. Your loss would be £200.
This is provided for information purposes only. It should not be taken as a recommendation.