Will AB Foods turn, or will it continue to rise beyond 2180p?

• The chart shows the last 14 months’ price action for AB Foods
• The shares have broken above a resistance level at 2138p to trade 2176p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Will the shares rise back to the channel ceiling at 2500p?
• Shares -25.7% from 2018 highs; +7.4% from 2018 lows; +6.5% year-to-date.
• 3 Jan: RBS says Next’s Christmas sales cheer bodes well for rivals
• 17 Dec: UK clothing retailers drop After ASOS cuts sales view
• 7 Dec: AB Foods reiterates group outlook for current financial year
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

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 2176p. To do this, you need £2,000.

Let’s assume the AB Foods trend continues upwards to 2500p (+14.9%). Your profit would be £1490, 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. AB Foods breaks lower, falling 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.