Will Capita turn, or will it continue to rise beyond 133p?

• The chart shows the last 2 weeks’ price action for Capita.
• The shares have broken above a resistance level at 113p to trade 116p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Shares -55.7% from 2018 highs; +48.7% from 2018 lows; -52.6% year-to-date.
• Shares rallying after sector peer Serco upgraded its earnings guidance.
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Capita– 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 Capita using a CFD, at the current price of 116p. To do this, you need £2,000.

Let’s assume the Capita trend continues to 133p recent highs (+14.6%). Your profit would be £1460, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 7% from the current price. Capita breaks lower, falling 7% and it hits your stop-loss. Your loss would be £700.

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