Centrica (owner of British Gas)
A range trading opportunity for you?
Will Centrica break lower, or will it rise back again to 140p?
- The Centrica trading range has developed since mid-November.
- Shares bounced off rising support zone 3 times, most recently yesterday.
- Now trading 133p (at time of writing).
- Will the pattern repeat itself, testing previous highs?
- Shares -5.8% from 2019 highs; +1.4% from 2019 lows; -1% year-to-date
- 7 Jan: Centrica’s share shrugging off Jefferies warning about its credit rating.
- 7 Jan: Centrica’s borrowing costs actually falling as the British Gas owner keeps its investment-grade rating.
- Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal
Trading Centrica – An Example
Let’s say you like the Centrica range, you think it’s heading back towards 140p again. You decide to buy exposure to £10,000 worth of Centrica using a CFD, at the current price of 133p. To do this, you need £2,000.
Let’s assume Centrica rises back to 140p channel ceiling (+5.2%). Your profit would be £520, from your initial investment of £2,000.
Conversely, let’s assume you open the above position, and place a stop-loss at 3% from the current price. Centrica 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.