Will Serco turn, or will it continue to rise beyond 104p October highs?

• The chart shows price action for Serco since mid-October
• The shares have broken above a falling highs resistance level around 91p to trade 98p (at time of writing).
• Shares up more than 10% today. The ‘trend is your friend’. Will it continue?
• Outsourcing company upgraded its earnings guidance after lower-than-expected tax bill.
• Said FY earnings per share are now expected 5-10% above market consensus.
• 13 Dec: Brokers at Jefferies is expecting a return to revenue growth for the first time in five years in 2019.
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Serco – 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 Serco using a CFD, at the current price of 98p. To do this, you need £2,000.

Let’s assume the Serco trend continues to 104p October highs (+6.1%). Your profit would be £610, 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. Serco breaks lower, 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.