Will British American Tobacco continue falling, or will it rise again back to October high of 3659p?

• British American Tobacco shares have fallen 9% today.
• Tobacco shares down after a Wall Street Journal report that the US FDA is considering banning menthol cigarettes.
• Currently trading at 3017p (at time of writing).
• Shares -35% from 2018 highs; +4.5% from 2018 lows; -39.7% year-to-date.
• Recent share price range: Nov lows 2981p; Oct highs 3659p.
• Can the stock recover to yesterday’s highs?
• Source: Dow Jones, Bloomberg, FT, Company News

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Trading British American Tobacco – An Example

Let’s say you feel that the stock is a bargain and you think it could bounce back to recent highs of 3659p. You decide to buy exposure to £10,000 worth of British American Tobacco using a CFD, at the current price of 3017p. To do this, you need £2,000.

Let’s assume British American Tobacco recovers back to 3659p October high (+21.3%). Your profit would be £2130, from your initial investment of £2000.

Conversely, let’s assume you open the above position, and place a stop-loss at 7% from the current price. British American Tobacco falls 7% and hits your stop-loss. Your loss would be £700.

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