Will Ocado continue falling, or will it rise again back to recent 874p November highs?

• Ocado shares have fallen close to 12% in the past week to trade 752p (at time of writing).
• Shares -34% from 2018 highs; +97.2% from 2018 lows; +89.5% year-to-date.
• The online retailer has been hurt by the weakness of the US tech sector, including Amazon and Alphabet.
• Sector read-across is hurting other online platforms like Ocado.
• Can the stock regain recent highs?
• Source: Dow Jones, Bloomberg, FT, Company News

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Trading Ocado – An Example

Let’s say you feel that the stock is a bargain and you think it could bounce back to recent highs of 874p. You decide to buy exposure to £10,000 worth of Ocado using a CFD, at the current price of 752p. To do this, you need £2000.

Let’s assume Ocado recovers back to 874p (+16.2%). Your profit would be £1620, from your initial investment of £2000.

Conversely, let’s assume you open the above position, and place a stop-loss at 5% from the current price. Ocado falls 5% and hits your stop-loss. Your loss would be £500.

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