Does this Upgrade present an opportunity for you?

Is it irrelevant, or will the Upgrade make the BHP Billiton share price more attractive?

• The chart shows the BHP Billiton share price since September.
• Morningstar upgrades BHP Billiton to Buy, reiterating the medium-term target price of 1,380p
• Consensus summary: 6 Buys, 21 Holds, 2 Sell; Average target: 1,736p (Source: Bloomberg).
• Current share price 1,555p (at time of writing).
• Will the shares turn back, or will the upgrade push the shares back towards October high of 1,709p?
• Shares -14.7% from 2018 highs; +14% from 2018 lows; +2.2% year-to date

Click to enlarge

Trading BHP Billiton – An Example

Let’s say you think that BHP Billiton shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of BHP Billiton using a CFD, at the current price of 1,555p. To do this, you need £2,000.

For the purpose of this example, let’s assume the BHP Billiton share price rises to 1,736p (+11.6%). Your profit would be £1,160 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 10% from the current price. BHP Billiton shares continue their downtrend, they fall 10% and hit your stop-loss. Your loss would be £1,000.

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