Will Drax turn, or will it continue to rise towards Jan highs of 414p?

• Breakout above 387p to trade 389p  (at time of writing).
• The ‘trend is your friend’. Will it continue towards 414p?
• Shares -6.1% from 2019 highs; +12.7% from 2019 lows; +8.6% year-to-date.
• 26 Feb: Drax 2018 Earnings in Line; defensive shares
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

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Trading Drax– An Example

Let’s say the breakout appeals to you, you think it’s likely to continue to 414p . You decide to buy exposure to £10,000 worth of Drax using a CFD, at the current price 389p (at time of writing). To do this, you need £2,000.

Let’s assume the Drax trend continues upwards to 414p (+6.4%). Your profit would be £640, 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. Drax 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.