Will Drax continue falling, or will it recover to 386p recent highs?

• Drax shares -8% from recent highs; -4% today after a broker downgrade.
• Credit Suisse double-downgraded the energy company to Underperform.
• Shares bounced +1% from today’s worst levels.
• Now trades 360p (at time of writing).
• Shares -13.1% from 2019 highs; +4.3% from 2019 lows; +0.4% year-to-date.
• Can the stock recover to recent highs?
• Source: Dow Jones, Bloomberg, FT, Company News, AlphaTerminal

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Trading Drax – An Example

Let’s say you feel that the stock is a bargain and you think could bounce back towards 386p recent highs. You decide to buy exposure to £10,000 worth of Drax using a CFD, at the current price of 360p. To do this, you need £2,000.

Let’s assume Drax recovers back to 386p recent highs (+7.2%). Your profit would be £720, 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. Drax 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.