Will Merlin Entertainments turn, or will it continue to rise beyond 407p?

• The chart shows the price action for Merlin Entertainments since late July.
• The shares have broken beyond a resistance trendline at 342p to trade 349p (at time of writing).
• Shares +8% in 4 weeks. The ‘trend is your friend’. Will it continue?
• Shares -15.3% from 2018 highs; +15.6% from 2018 lows; -3.6% year-to-date.
• 16 Oct: The theme park company reported +4.7% revenue in the first 40 weeks of the year and said it anticipates full-year results will be in line with market expectations. 
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Merlin Entertainments – An Example

Let’s say the breakout appeals to you, you think it’s likely to continue to . You decide to buy exposure to £10,000 worth of Merlin Entertainments using a CFD, at the current price 349p (at time of writing). To do this, you need £2,000.

Let’s assume the Merlin Entertainments trend continues upwards to 407p October highs (+16.6%). Your profit would be £1660, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 8% from the current price. Merlin Entertainments breaks lower, falling 8% and it hits your stop-loss. Your loss would be £800.

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