A range trading opportunity for you?
Will Drax break support, or will it rise again back to 445p?
- The Drax rising channel range has developed since May/June.
- Bounced off rising support 7 times, most recently this week.
- Currently trading 396p (at time of writing)
- Will the pattern repeat itself, testing previous highs?
- Shares -9.7% from 2018 highs; +79.2% from 2018 lows; +46.5% year-to-date
- 3 Dec: £702m acquisition of Scottish Power amended for risk of lower 2019 government capacity payments
- Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal
Trading Drax – An Example
Let’s say you like the range, you think it’s heading back towards 445p again. You decide to buy exposure to £10,000 worth of Drax using a CFD, at the current price of 396p. To do this, you need £2,000.
Let’s assume Drax recovers back to 445p (+12.3%). Your profit would be £1230, from your initial investment of £2,000.
Conversely, let’s assume you open the above position, and place a stop-loss at 5% from the current price. Drax falls 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.