Is this breakdown a good trade for you?

Will Ashtead turn, or will it continue to fall beyond 2228p?

• The chart shows the last 5 month’s price action for Ashtead
• The shares have broken below a support level at 2298p to trade 2227.5p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Will the shares fall back to March 1864p lows?
• Shares -6.5% from 2018 highs; +23.2% from 2018 lows; +11.9% year-to-date.
• 11 Sept: Ashtead reported strong Q1 results, driven by its international division
• 11 Sept: Shares in Ashtead remain a buy, says Peel Hunt as Q1 profits rise it expands share buybacks
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Ashtead – An Example

Let’s say the breakdown appeals to you, you think it’s likely to continue. You decide to sell exposure to £10,000 worth of Ashtead using a CFD, at the current price of 2227.5p. To do this, you need £2,000.

Let’s assume the Ashtead trend continues downwards to 1864p (-16.3%). Your profit would be £1630, 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. Ashtead breaks higher, rising 5% and it hits your stop-loss. Your loss would be £500.

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