Does this Upgrade present an opportunity for you?

Is it irrelevant, or will the Upgrade make the Anglo American share price more attractive?

• The chart shows the Anglo American share price since early September.
• Today Societe Generale has upgraded Anglo to Buy, and upped its target to 1890p (from 1750p).
• Consensus summary: 18 Buys, 8 Holds, 5 Sell; Average target: 1890p (Source: Bloomberg).
• Current share price 1636p (at time of writing).
• Will the shares turn back, or will the upgrade push the shares back towards 1767p late September highs?
• Shares -17.5% from 2018 highs; +12.0% from 2018 lows; +5.7% year-to date
• 24 Oct: Anglo American-Hindustan zinc merger would help balance Sheet: Jefferies
• 23 Oct: Anglo American earnings consensus to edge higher: Citi
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Anglo American – An Example

Let’s say you think that Anglo shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Anglo using a CFD, at the current price of 1635p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Anglo share price rises to 1767p (+8%). Your profit would be £800 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. Anglo shares fall 3% and hit your stop-loss. Your loss would be £300.

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