Is this breakout a good trade for you?

Will HSBC turn, or will it continue to break upwards beyond 680p?

• The chart shows the last 3 weeks of price action for HSBC.
• The shares have broken above a resistance line at 669p.
• The ‘trend is your friend’. Will it continue?
• Shares made bullish reversal from 16-month lows
• Shares -15.4% from 2018 highs; +4.9% from 2018 lows; -11.7% year-to-date
• Sunday Telegraph (3 Sept) said HSBC preparing to launch new digital bank with focus on small-business customers
• Like Standard Chartered, HSBC is more exposed to Asia than peers Lloyds, Barclays and RBS.

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Trading HSBC – 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 HSBC using a CFD, at the current price of 677p. To do this, you need £2,000.

Let’s assume HSBC’s trend continues to July highs of 735p (+8.5%). Your profit would be £857, 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. HSBC’s trend breaks down, 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.