Will Micro Focus turn, or will it continue to rise beyond 1294p?

• The chart shows the last 3 weeks’ price action for Micro Focus.
• The shares have broken above recent highs of 1275p
• Shares trading 1294p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Shares -52.8% from 2018 highs; +57.4% from 2018 lows; -48.7% year-to-date.
• 5 Nov: Citi says Micro Focus should cut debt, not buy back shares
• 5 Nov: Numis says Micro Focus 2018 EPS could beat expectations
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Micro Focus – 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 Micro Focus using a CFD, at the current price of 1294p. To do this, you need £2,000.

Let’s assume the Micro Focus trend continues to 1448p mid-Oct highs (+11.9%). Your profit would be £1190, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 5% from the current price. Micro Focus breaks lower, falling 5% and it hits your stop-loss. Your loss would be £500.

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