Is this trend a good trading opportunity?

Will British American Tobacco turn, or will it continue to rise to August high of 4236p?

• The chart shows the British American Tobacco price action in October.
• Shares in a week-long uptrend from 3171p lows; now at 3560p.
• Shares -31.4% from 2018 highs; +10.5% from 2018 lows; -29% year-to-date.
• Shares in an uptrend since the company backed its FY profits target on 16 Oct.
• Non-cyclical tobacco manufacturers tend to fare better in a market downturn.
• In the past week, the shares have risen over 12%. Will this momentum continue?

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Trading British American Tobacco – An Example

Let’s say the trend appeals to you, you think it’s likely to continue. You decide to buy exposure to £10,000 worth of British American Tobacco using a CFD, at the current price of 3560p. To do this, you need £2,000.

Let’s assume British American Tobacco trend continues to August high of 4236p (+18.9%). Your profit would be £1890, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 9% from the current price. British American Tobacco falls 9% and hits your stop-loss. Your loss would be £900.

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