Will Lonmin continue falling, or will it rise again back to recent 63p October highs?

• Lonmin shares have fallen close to 20% in the past week to trade 45p (at time of writing).
• Shares -47% from 2018 highs; +35% from 2018 lows; -45.6% year-to-date.
• Recent share price range: Oct lows 42.7p; Oct highs 63p.
• The mining company is major producer of platinum-group metals (PGMs).
• Recent industrial slowdown in China and the worries over the US-China trade war is hurting mining stocks.
• Can the stock regain recent highs?
• Source: Dow Jones, Bloomberg, FT, Company News

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Trading Lonmin – An Example

Let’s say you feel that the stock is a bargain and you think it could bounce back to recent highs of 63p. You decide to buy exposure to £10,000 worth of Lonmin using a CFD, at the current price of 45p. To do this, you need £2,000.

Let’s assume Lonmin recovers back to 63p (+40%). Your profit would be £4000, from your initial investment of £2000.

Conversely, let’s assume you open the above position, and place a stop-loss at 9% from the current price. Lonmin falls 9% and hits your stop-loss. Your loss would be £900.

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