A range trading opportunity for you?
Will Drax break support, or will it rise back to 427p highs?
- 357-427p range; bounced off long-term rising support.
- Now trades 380p (at time of writing)
- Will the pattern repeat itself, rising back to 427p Oct/Nov highs?
- Shares -8.3% from 2019 highs; +10.1% from 2019 lows; +6% year to date
- 26 Feb: Citi says Drax 2018 Earnings in-line
- 8 Feb: Drax launches UK’s first carbon-capture project at biomass plant
- 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 427p again. You decide to buy exposure to £10,000 worth of Drax using a CFD, at the current price of 380p. To do this, you need £2,000.
Let’s assume Drax rises to 427p (+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.