Is this breakout a good trade for you?

Will AB Foods turn, or will it continue to rise beyond 2323p?

• The chart shows the last 2 month’s price action for AB Foods
• The shares have broken above a resistance level at 2310p to trade 2323p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Will the shares rise back to August 2481p highs?
• Shares -20.7% from 2018 highs; +5.4% from 2018 lows; -17.6% year-to-date.
• 4 Oct: Berenberg says ABF share price declines no Concern
• 10 Sept: Primark-owner ABF to cut costs in Sugar business; Primark + Food performance eclipses Sugar weakness
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading AB Foods – 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 AB Foods using a CFD, at the current price of 2323p. To do this, you need £2,000.

Let’s assume the AB Foods trend continues upwards to 2481p (+6.8%). Your profit would be £680, 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. AB Foods 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.