Will Redrow break lower, or will it rise to 575p again?

• The Redrow trading range has developed since late October .
• Shares bounced back from support 4 times, most recently last week.
• Now trading 535p (at time of writing).
• Will the pattern repeat itself, testing previous highs?
• Shares -20.87% from 2018 highs; +6.1% from 2018 lows; -18.4% year-to-date
• 7 Nov: Housebuilder reported that its average selling price has risen 4.6% this year and order book increased by 11%.
• Source: Bloomberg, FT, Reuters, DJ Newswires

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Trading Redrow – An Example

Let’s say you like the Redrow range, you think it’s heading back towards 575p again. You decide to buy exposure to £10,000 worth of Redrow using a CFD, at the current price of 535p. To do this, you need £2,000.

Let’s assume Redrow rises back to 575p (+7.5%). Your profit would be £750, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 3% from the current price. Redrow falls 3% and hits your stop-loss. Your loss would be £300.

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