Is this trend a good trading opportunity?

Will Taylor Wimpey turn, or will it continue to fall to 144p November 2016 lows?

• The chart shows the Taylor Wimpey price action over the past month.
• Shares in a month-long downtrend from 174p October highs; now at 153p.
• Negative momentum built up after PM May said (4 Oct) she will end a cap on what councils can borrow to build new homes, hurting the UK Index housebuilders’ supply chain.
• Shares -28.5% from 2018 highs; now trading at 2018 lows; -25.7% year-to-date.
• In the past 3 weeks, the shares have fallen over 10%. Will this momentum continue?

Click to enlarge

Trading Taylor Wimpey – 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 Taylor Wimpey using a CFD, at the current price of 153p. To do this, you need £2,000.

Let’s assume Taylor Wimpey trend continues to 144p November 2016 lows (-5.8%). Your profit would be £580, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 7% from the current price. Taylor Wimpey rises 7% and hits your stop-loss. Your loss would be £700.

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