Will HSBC turn, or will it continue to break upwards beyond 735p?

• The chart shows the last 6 months of price action for HSBC.
• The shares have broken above a resistance line at 666p.
• Now trading at 671p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Shares -18.1% from 2018 highs; +9.6% from 2018 lows; -12.5% year-to-date
• UK Index Bank shares helped by approval of UK/EU Brexit agreement by EU leaders.
• Hope for progress on resolving US-China trade war is also helping the breakout.
• Like Standard Chartered, HSBC is more exposed to Asia than peers Lloyds, Barclays and RBS.

Click to enlarge

Trading HSBC – 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 HSBC using a CFD, at the current price of 671p. To do this, you need £2,000.

Let’s assume HSBC’s trend continues to July highs of 735p (+9.5%). Your profit would be £950, 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. HSBC’s trend breaks down, falling 3% and it hits your stop-loss. Your loss would be £300.

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