Will Persimmon turn, or will it continue to rise beyond 2400p?

• The chart shows the last 5 months’ price action for Persimmon.
• The shares have broken out from a multi-month downtrend
• Shares trading 2396p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Shares -21.2% from 2018 highs; +6.5% from 2018 lows; -12.5% year-to-date.
• The shares have rallied back on a 2yr extension to the government’s Help to Buy scheme
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Persimmon – 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 Persimmon using a CFD, at the current price of 2396p. To do this, you need £2,000.

Let’s assume the Persimmon trend continues to 2907p June highs (+21.3%). Your profit would be £2130, 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. Persimmon 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.