Is this breakout a good trade for you?

Will National Grid turn, or will it continue towards 837p Aug highs ?

• The chart shows the last 2 month’s price action for National Grid
• The shares have broken above a resistance line at 792p to trade 801p (at time of writing).
• Bullish flag pattern from September lows?
• The ‘trend is your friend’. Will it continue?
• Will the shares rally back to August highs of 837p?
• Shares -11.6% from 2018 highs; +8% from 2018 lows; -8.5% year-to-date.
• Utilities considered defensive and non-cyclical, helpful in terms of market uncertainty about economic growth
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading National Grid – 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 National Grid using a CFD, at the current price of 800p. To do this, you need £2,000.

Let’s assume the National Grid trend continues upwards to 837p (+4.6%). Your profit would be £460, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 2% from the current price. National Grid breaks down, falling 2% and it hits your stop-loss. Your loss would be £200.

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