A range trading opportunity for you?

Will AB Foods break lower, or will it rise back again to 2380p?

• AB Foods is in a rising channel range since late August.
• Bounced off rising support trendline 6 times,
• Now trading 2323p (at time of writing)
• Will the pattern repeat itself, testing previous highs?
• Shares -21.4% from 2018 highs; +4.5% from 2018 lows; -17.6% year-to-date
• 4 Oct: Share price [declines] no concern for Berenberg
• Source: Bloomberg, FT, Reuters, DJ Newswires

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Trading AB Foods – An Example

Let’s say you like the range, you think it’s heading back towards 2380p again. You decide to buy exposure to £10,000 worth of AB Foods using a CFD, at the current price of 2323p. To do this, you need £2,000.

Let’s assume AB Foods rises back to 2380p (+2.5%). Your profit would be £250, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 2% from the current price. AB Foods falls 2% and hits your stop-loss. Your loss would be £200.

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