Is this trend a good trading opportunity?

Will Premier Oil turn, or will it continue to fall to 93.4p May lows?

• The chart shows the Premier Oil price action over the past month.
• Shares in a month-long downtrend from 147p October highs; now at 105p.
• Oil prices  are under pressure after bigger than expected US inventory build
• Weaker demand for crude oil and promised supply hike from Saudi Arabia is hurting oil companies
• Shares -28% from 2018 highs; +62.2% from 2018 lows; +40.2% year-to-date.
• In the past 3 weeks, the shares have fallen close to 25%. Will this momentum continue?

Click to enlarge

Trading Premier Oil – 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 Premier Oil using a CFD, at the current price of 105p. To do this, you need £2,000.

Let’s assume Premier Oil trend continues to 93.4p May lows (-11%). Your profit would be £1100, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 5% from the current price. Premier Oil rises 5% and hits your stop-loss. Your loss would be £500.

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