Is this trend a good trading opportunity?

Will Sophos turn, or will it continue to fall beyond 434p?

• The chart shows the Sophos price action over the past 2 weeks.
• Shares in a week-long downtrend from 506p October highs; now at 441.5p.
• Shares -32.7% from 2018 highs; +13.6% from 2018 lows; -22.6% year-to-date
• In the past week weeks, the shares have fallen 10%. Will this negative momentum continue?
• Sophos was recently downgraded to Hold by Deutsche Bank (17 Sept), with the target price cut to 530p (from 630p).

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Trading Sophos – An Example

Let’s say the trend appeals to you, you think it’s likely to continue. You decide to sell exposure to £10,000 worth of Sophos using a CFD, at the current price of 441.5p. To do this, you need £2,000.

Let’s assume the Sophos trend continues to 2018 low of 399.8p (-9.4%). Your profit would be £940, 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. Sophos shares rise 5% and hit your stop-loss. Your loss would be £500.

This is provided for information purposes only. It should not be taken as a recommendation.