Is this breakout a good trade for you?

Will National Grid turn, or will it continue to rise beyond 877p July highs?

• The chart shows the last 3 weeks’ price action for National Grid.
• The shares have broken above horizontal resistance at 837p.
• Currently trading at 843p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• National Grid is considered a defensive stock (safe, high-dividend investment).
• Investors are showing preference for defensives in a downbeat market.
• Shares -7.35% from 2018 highs; +13.1% from 2018 lows; -3.7% year-to-date.
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading National Grid – 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 National Grid using a CFD, at the current price of 843p. To do this, you need £2,000.

Let’s assume the National Grid trend continues to 877p July highs (+4%). Your profit would be £400, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 3% from the current price. National Grid breaks lower, falling 3% and it hits your stop-loss. Your loss would be £300.

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