Will IAG turn, or will it continue to rise beyond 625p?

• The chart shows the last 6 weeks’ price action for IAG
• The shares have broken above a resistance like at 609p, and having rising support since late Oct
• Now trading 623p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Shares -16.0% from 2018 highs; +11.7% from 2018 lows; -4.3% year-to-date.
• 6 Nov: Oct passengers KM +6.6% on capacity +6.7%, passengers +7.9%, load factor flat
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading IAG – 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 IAG using a CFD, at the current price of 623p. To do this, you need £2,000.

Let’s assume the IAG trend continues upwards to 696p Sept highs (+11.7%). Your profit would be £1170, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 4% from the current price. IAG breaks lower, falling 4% and it hits your stop-loss. Your loss would be £400.

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