Will British American Tobacco turn, or will it continue falling to 2258p 2011 lows?

• The chart shows British American Tobacco price action over the last 5 weeks.
• Shares in a monthlong downtrend from 3659p October highs; now at 2708p.
• The shares have fallen close to 30% in the past month. Will this momentum continue?
• Shares -45.7% from 2018 highs; now trading at 2018 lows; -46.2% year-to-date.
• Share trading at 7 year lows after US FDA announced plans to ban menthol cigarettes.
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading British American Tobacco – An Example

Let’s say the trend appeals to you, you think it’s likely to continue. You decide to sell exposure to £10,000 worth of British American Tobacco using a CFD, at the current price of 2708p. To do this, you need £2,000.

Let’s assume British American Tobacco trend continues to the 2258p 2011 lows (-16.6%). Your profit would be £1660, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 6% from the current price. British American Tobacco falls 6% and hits your stop-loss. Your loss would be £600.

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