Will Shire turn, or will it continue to rise beyond 4718p?

• The chart shows the last 20 month’s price action for Shire
• The shares have broken above a resistance level at 4642p to trade 4718p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Takeda is offering Shire shareholders £49/share (shares and cash)
• Will Shire close the gap with Takeda’s £49 offer price as the deal nears completion?
• Shares -1.8% from 2018 highs; +56.9% from 2018 lows; +20.4% year-to-date.
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Shire – An Example

Let’s say the breakout appeals to you, you think it’s likely to continue. You decide to buy exposure to £10,000 worth of Shire using a CFD, at the current price 4723p. To do this, you need £2,000.

Let’s assume the Shire trend continues upwards to £49p (+3.7%). Your profit would be £370, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 2% from the current price. Shire breaks lower, falling 2% and it hits your stop-loss. Your loss would be £200.

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