Is this trend a good trading opportunity?

Will BAE Systems turn, or will it continue to rise beyond 643p September highs?

• The chart shows BAE Systems price action over the last 3 weeks.
• Shares falling since the US Army opened its annual trade show near Washington, with analysts seeing sector competitors potentially winning large ground vehicle contracts away from BAE Systems. (Source: DowJones)
• Brokers still remain bullish on the company shares, with analysts at Bernstein saying BAE Systems is “undervalued” and could benefit from new export contracts in Saudi Arabia.
• Shares -13.2% from 2018 highs; +6.2% from 2018 lows; +2.4% year-to-date.
• Shares in a sustained downtrend, falling -7.7% over the past 3 weeks. Will this momentum continue?

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Trading BAE Systems – An Example

Let’s say the trend appeals to you, you think it’s likely to continue. You decide to buy exposure to £10,000 worth of BAE Systems using a CFD, at the current price of 586p. To do this, you need £2,000.

Let’s assume BAE Systems trend continues to September highs of 643p (+9.7%). Your profit would be £970, 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. BAE Systems falls 5% and hits your stop-loss. Your loss would be £500.

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