A range trading opportunity for you?
Will Fresnillo break lower, or will it rise to 926p again?
- The Fresnillo falling range has developed since late August.
- Shares bounced back from support 3 times.
- Now trading 786p (at time of writing).
- Will the pattern repeat itself, testing previous highs?
- Shares -48.4% from 2018 highs; +2.1% from 2018 lows; -45.0% year-to-date
- 27 Nov: UBS says too early to tell impact of new Mexico mining laws; Fresnillo looks good long term
- Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal
Trading Fresnillo – An Example
Let’s say you like the Fresnillo range, you think it’s heading back towards 926p again. You decide to buy exposure to £10,000 worth of Fresnillo using a CFD, at the current price of 785p. To do this, you need £2,000.
Let’s assume Fresnillo rises back to 926p (+18.0%). Your profit would be £1800, 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. Fresnillo 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.