Will Fresnillo continue falling, or will it rise again back to 937p?

• The price has fallen close to 7% today.
• It has been as high as 937p yesterday. It is now at 851p (at the time of writing).
• Morgan Stanley downgraded the company to Underweight, with a target price of 715p (from 1100p).
• Silver miner’s shares hit 100-day Moving Average resistance yesterday.
• Rotation out of safe-havens into risk assets is hurting precious metals miners.
• Shares -41.6% from 2018 highs; +12.8% from 2018 lows; -40.3% year-to-date.
• Source: Bloomberg, FT, Reuters, DJ Newswires

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Trading Fresnillo – An Example

Let’s say you feel that the stock is a bargain and you think could bounce back towards November highs of 937p again. You decide to buy exposure to £10,000 worth of Fresnillo using a CFD, at the current price of 851p. To do this, you need £2000.

Let’s assume Fresnillo recovers back to 937p (+10.1%). Your profit would be £1010, 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. Fresnillo 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.