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

• The chart shows the HSBC share price since August 2015.
• Shore Capital upgrades HSBC to Hold, keeping the target price unchanged.
• Consensus summary: 12 Buys, 5 Holds, 4 Sell; Average target: 755p (Source: Bloomberg).
• Current share price 632p (at time of writing).
• HSBC beat market expectations in latest Q3 results (29 Oct), with pre-tax profit +16% YoY.
• Shares -24% from 2018 highs; +1.5% from 2018 lows; +17.6% year-to date
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading HSBC – An Example

Let’s say you think that HSBC shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of HSBC using a CFD, at the current price of 632p. To do this, you need £2,000.

For the purpose of this example, let’s assume the HSBC share price rises to 683p September high (+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 4% from the current price. HSBC shares continue their downtrend, they fall 4% and hit your stop-loss. Your loss would be £400.

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