Is this breakout a good trade for you?

Will Britvic turn, or will it continue to rise beyond 800p?

• The chart shows the last 2 weeks’ price action for Britvic.
• The shares have broken above horizontal resistance at 760p to trade 772p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Will the shares rise back to September’s 829p highs?
• According to broker Berenberg (15 Aug), Britvic shares are undervalued given considerable increase in free cash flow on the horizon and positive financial outlook.
• Recent trading update showed Britvic remained on track to meet full-year expectations.
• Shares -10.5% from 2018 highs; +14.7% from 2018 lows; -4.8% year-to-date.
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Britvic – 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 Britvic using a CFD, at the current price of 772p. To do this, you need £2,000.

Let’s assume the Britvic trend continues upwards to 829p (+9%). Your profit would be £900, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 10% from the current price. Britvic breaks lower, falling 10% and it hits your stop-loss. Your loss would be £1,000.

This is provided for information purposes only. It should not be taken as a recommendation.