Is this breakout a good trade for you?

Will Fresnillo turn, or will it continue to rise beyond 1,000p?

• The chart shows the last 6 months’ price action for Fresnillo.
• The shares have broken above falling highs resistance around 825p to trade 904p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Will the shares rise back to May’s 1,364p highs?
• Shares -40% from 2018 highs; +16% from 2018 lows; -36.7% year-to-date.
• Fresnillo is a Mexico-focused silver miner.
• Precious metals prices are advancing thanks to turbulence on global equity markets, creating demand for safe-haven assets like gold and silver.
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Fresnillo – 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 Fresnillo using a CFD, at the current price of 904p. To do this, you need £2,000.

Let’s assume the Fresnillo trend continues upwards to 1,364p May highs (+50%). Your profit would be £5,000, 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. Fresnillo 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.