Is this breakout a good trade for you?

Will Petrofac turn, or will it continue to break upwards beyond 638p?

• The chart shows this month’s price action.
• It has recently broken above the key 631p level.
• The ‘trend is your friend’. Will it continue?
• Provides engineering and construction services to oil and gas production and processing industry
• On 30 Aug, Morgan Stanley upgraded the shares to Hold (from Sell) and the target to 800p (from 650p)

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Trading Petrofac – 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 Petrofac using a CFD, at the current price of 637p. To do this, you need £2,000.

Let’s assume Petrofac’s trend continues to 700p. Your profit would be £990, 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, at 618p. Petrofac trend breaks down, falling 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.