Is this trend a good trading opportunity?
Will TUI turn, or will it continue to gain momentum beyond November 2016 lows around 1000p?
- The chart shows TUI’s share price action since late August.
- Shares in a 2-month downtrend from 1489p October highs; now at 1121p.
- TUI’s share price has been suffering from warm 2018 summer weather, with many holiday-goers postponing overseas vacations.
- Recent share price falls due to sector read-across after profits warnings from peer leisure operator Thomas Cook.
- Shares -39% from 2018 highs; now trading at 2018 lows; -27.3% year-to-date
- In the last 3 weeks, the shares have fallen by close to 13%. Will this momentum continue?
- Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal
Trading TUI – An Example
Let’s say the trend appeals to you, you think it’s likely to continue. You decide to sell exposure to £10,000 worth of TUI using a CFD, at the current price of 1121p. To do this, you need £2,000.
Let’s assume TUI trend continues to 1000p November 2016 lows (-10.8%). Your profit would be £1080, from your initial investment of £2,000.
Conversely, let’s assume you open the above position, and place a stop-loss at 5% above the current price. TUI rises 5% and hits your stop-loss. Your loss would be £500.
This is provided for information purposes only. It should not be taken as a recommendation.