Is this breakout a good trade for you?

Will Tesco turn, or will it continue to rise beyond 222p?

• The chart shows the last few weeks’ price action for Tesco
• The shares have broken above a resistance level at 219p to trade 221p (at time of writing).
• The ‘trend is your friend’. Will it continue?
• Will the shares rise back to September 245p highs?
• Shares -19.0% from 2018 highs; +13.8% from 2018 lows; +5.8% year-to-date.
• 4 Oct: Tesco’s Thailand shortfall can be recovered says Jefferies
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Tesco – 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 Tesco using a CFD, at the current price of 221p. To do this, you need £2,000.

Let’s assume the Tesco trend continues upwards to 245p (+10.8%). Your profit would be £1080, 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. Tesco 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.