Is this trend a good trading opportunity?

Will National Grid turn, or will it continue to rise to July high of 877p?

• The chart shows the National Grid price action since mid-September.
• Shares in a month-long uptrend from 760p lows; now at 835p.
• Shares -6.3% from 2018 highs; +14.5% from 2018 lows; -4.3% year-to-date.
• National Grid is considered a defensive stock (safe, high-dividend investment).
• Investors are showing preference for defensive stocks in a downbeat market.
• Brokers at Berenberg (10 Oct) say regulatory environment for utility companies is “reasonable” and there are growth opportunities on both sides of the Atlantic.
• In the past month, the shares have risen close to 10%. Will this momentum continue?

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Trading National Grid – 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 National Grid using a CFD, at the current price of 835p. To do this, you need £2,000.

Let’s assume National Grid trend continues to July high of 877p (+5%). Your profit would be £500, 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 falls 3% and hits your stop-loss. Your loss would be £300.

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