Will Merlin Entertainments turn, or will it continue up towards 407p?

• Breakout above 376p to trade 380p (at time of writing).
• The ‘trend is your friend’. Will it continue towards 407p?
• Shares -0.2% from 2019 highs; +22% from 2019 lows; +19.9% year-to-date.
• 23 May: Merlin backs strategy after activist calls for sale
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Merlin Entertainments – An Example

Let’s say the breakout appeals to you, you think it’s likely to continue to 407p . You decide to buy exposure to £10,000 worth of Merlin using a CFD, at the current price 380p (at time of writing). To do this, you need £2,000.

Let’s assume the Merlin trend continues upwards to 407p (+7.1%). Your profit would be £710, 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. Merlin 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.