Will Anglo American turn, or will it continue to rise beyond 1948p?

• The chart shows the price action for Anglo American since late May.
• The shares have broken above a rising resistance trendline at 1802p.
• The shares are currently 1825p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Shares -2.2% from 2019 highs; +5.3% from 2019 lows; +4.3% year-to-date.
• 24 Dec: Increased 2019 production guidance for its Minas Rio iron ore minel.
• 11 Dec: Expects production 2% above previous guidance and costs 5% lower
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Anglo American – An Example

Let’s say the breakout appeals to you, you think it’s likely to continue to 1948p. You decide to buy exposure to £10,000 worth of Anglo American using a CFD, at the current price 1825p (at time of writing). To do this, you need £2,000.

Let’s assume the Londonmetric trend continues upwards to 1948p (+6.7%). Your profit would be £670, 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. Anglo American 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.