Will Smith & Nephew turn, or will it continue to rise beyond 1457p?

• The chart shows the price action for Smith & Nephew over the last 2 yrs.
• The shares have broken above a resistance trendline at 1430p to trade fresh record highs.
• The shares are currently 1455p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Shares -1.0% from 2018 highs; +24.5% from 2018 lows; +12.9% year-to-date.
• Smith & Nephew designs manufactures and markets orthopaedic devices
• 1 Nov: Q3 trading updates shows 3% organic revenues growth; FY guidance reconfirmed
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Smith & Nephew – An Example

Let’s say the breakout appeals to you, you think it’s likely to continue to 1600p. You decide to buy exposure to £10,000 worth of Smith & Nephew using a CFD, at the current price 1455p (at time of writing). To do this, you need £2,000.

Let’s assume the Smith & Nephew trend continues upwards to 1600p (+10.3%). Your profit would be £1030, 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. Smith & Nephew breaks lower, 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.