Will Lancashire Insurance turn, or will it continue to rise beyond 642p?

• The chart shows this year’s share price action for Lancashire Insurance
• The shares have broken above a resistance line at 624p to trade 642p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Will the shares rise back to 2018 highs of 699p?
• Shares -11.6% from 2018 highs; +23.4% from 2018 lows; -6.2% year-to-date.
• 1 Nov: Lancashire Holdings Q3 Pretax loss narrows by 81%
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Lancashire Insurance – 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 Lancashire Insurance using a CFD, at the current price of 642p. To do this, you need £2,000.

Let’s assume the Lancashire Insurance trend continues upwards to 699p (8.9%). Your profit would be £890, 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. Lancashire Insurance 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.