Will Polypipe turn, or will it continue to rise beyond 395p 5-month highs?

• The chart shows the last 6 months’ price action for Polypipe
• The shares have broken above shallow falling highs resistance at 380p
• Now trading 394.6p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Shares -9.6% from 2018 highs; +26.9% from 2018 lows; +0.4% year-to-date.
• 26 Oct: Peel Hunt says valuation too low for a market leader
• 26 Oct: Numis says Manthorpe deal set to boost 2019 Earnings
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Polypipe – 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 Polypipe using a CFD, at the current price of 394.6p. To do this, you need £2,000.

Let’s assume the Polypipe trend continues upwards to 428p May highs (+8.3%). Your profit would be £830, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 4% from the current price. Polypipe breaks lower, falling 4% and it hits your stop-loss. Your loss would be £400.

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