A range trading opportunity for you?

Will Pennon break resistance, or will it fall again back to 665p?

• The Pennon falling range has developed since July.
• Bounced off falling highs resistance 6 times, most recently on Wednesday.
• Now trading 732p (at time of writing).
• Will the pattern repeat itself, testing channel floor around 665p?
• Shares -9.6% from 2018 highs; +27.6% from 2018 lows; -6.5% year-to-date.
• H1 Results will be published on 27 November.
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Pennon – An Example

Let’s say you like the Pennon range, you think it’s heading back down to 665p again. You decide to sell exposure to £10,000 worth of Pennon using a CFD, at the current price of 732p. To do this, you need £2,000.

Let’s assume Pennon falls back to 665p (+9.1%). Your profit would be £910, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 4% from the current price. Pennon falls 4% and hits your stop-loss. Your loss would be £400.

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