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

• The chart shows the Burberry share price since September 2016.
• MainFirst Bank upgrades Burberry to Neutral, leaving the target price to 1800p.
• Consensus summary: 2 Buys, 14 Holds, 8 Sell; Average target: 1949p (Source: Bloomberg).
• Current share price 1899p (at time of writing).
• Long-term rising channel, with shares bouncing off channel floor on hopes of a US-China trade deal.
• Will the shares turn back, or will the upgrade push the shares back towards record high of 2338p?
• Shares -22.3% from 2018 highs; +22.65% from 2018 lows; +6.25% year-to date

Click to enlarge

Trading Burberry – An Example

Let’s say you think that Burberry  shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Burberry using a CFD, at the current price of 1899p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Burberry share price rises to 2338p (+23.1%). Your profit would be £2,310 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 10% from the current price. Burberry shares continue their downtrend, they fall 10% and hit your stop-loss. Your loss would be £1,000.

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