Will Micro Focus turn, or will it continue to fall beyond 1300p?

• The chart shows the last 8 months’ price action for Micro Focus.
• The shares have broken below intersecting support at 1324p 
• Shares trading 1306p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Shares -47.1% from 2018 highs; +76.5% from 2018 lows; -48.2% year-to-date.
• Micro Focus extends share buy-back programme
• 5 Nov: Citi says Micro Focus should cut debt, not buy back shares
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Micro Focus – An Example

Let’s say the breakdown appeals to you, you think it’s likely to continue. You decide to sell exposure to £10,000 worth of Micro Focus using a CFD, at the current price of 1306p. To do this, you need £2,000.

Let’s assume the Micro Focus trend continues to 1170p Oct lows (-10.4%). Your profit would be £1040, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 5% from the current price. Micro Focus breaks higher, rising 5% and it hits your stop-loss. Your loss would be £500.

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