Is this breakout a good trade for you?

Will Drax Group turn, or will it continue to rise beyond 460p?

• The chart shows the last 2 months’ price action for Drax Group.
• The shares have broken above resistance level around 394p to trade 415p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Drax recently purchased Scottish Power Generation from Iberdrola fro £702m, expanding its asset portfolio.
• Will the shares rise back to 460p 2015 high?
• Shares currently at 2018 highs; +85% from 2018 lows; +53.5% year-to-date.
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Drax Group – An Example

Let’s say the breakout appeals to you, you think it’s likely to continue. You decide to buy exposure to £10,000 worth of Drax Group using a CFD, at the current price of 415p. To do this, you need £2,000.

Let’s assume the Drax Group trend continues to 460p (+10.8%). Your profit would be £1,080, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 8% from the current price. Drax Group breaks higher, rising 8% and it hits your stop-loss. Your loss would be £800.

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