Will Premier Oil turn, or will it continue to break upwards beyond 80p?

• The chart shows the price action for Premier Oil since late October
• The shares have broken above a resistance line at 76.5p to trade 78p.
• The ‘trend is your friend’. Will it continue?
• Shares -48.5% from 2018 highs; +38.4% from 2018 lows; +17.2% year-to-date
• 7 Dec: Premier Oil production in November, December tops forecasts
• Oil prices are rebounding from their pre-Christmas lows
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Premier Oil– 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 Premier Oil using a CFD, at the current price of 78p. To do this, you need £2,000.

Let’s assume Premier Oil’s trend continues to November highs of 109p (+40%). Your profit would be £4000, 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. Premier Oil‘s trend breaks down, 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.