Is this trend a good trading opportunity?

Will Ferguson turn, or will it continue to gain momentum toward 6,671p all-time highs?

• The chart shows price action since mid-August.
• Currently trading at 6,566p (as of the time of writing).
• Ferguson shares are on a strong 2018 momentum, +30.38 from 2018 lows, +23.2% year-to-date.
• Currently trading at 2018 highs and close to 6,671p all-time record highs recorded in March 2006.
• According to analysts at Berenberg (22 June), Ferguson has scope for further profit upgrades and can deliver a more comprehensive plumbing service than Amazon.
• Shares in a month-long uptrend (+8.5% in the last 5 weeks). Will the momentum continue?

Click to enlarge

Trading Ferguson – An Example

Let’s say the trend appeals to you, you think it’s likely to continue. You decide to buy exposure to £10,000 worth of Ferguson using a CFD, at the current price of 6,566p. To do this, you need £2,000.

Let’s assume Ferguson trend continues to 6,671p all-time record highs (+1.6%). Your profit would be £160, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 3% below the current price. Ferguson 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.