Will Pennon turn, or will it continue to fall towards 680p?

• Breakdown below 766p to trade 759p  (at time of writing).
• The ‘trend is your friend’. Will it continue down towards 680p?
• Shares -5.1% from 2019 highs; +11.3% from 2019 lows; +9.5% year-to-date.
• 25 Mar: Shares turned down after trading update
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Pennon – An Example

Let’s say the breakdown appeals to you, you think it’s likely to continue to 680p . You decide to sell exposure to £10,000 worth of Pennon using a CFD, at the current price 759p (at time of writing). To do this, you need £2,000.

Let’s assume the Pennon trend continues down towards 680p (-10.4%). Your profit would be £1040, 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. Pennon breaks higher, rising 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.