Is this trend a good trading opportunity?

Will Dunelm turn, or will it continue to rise to May highs of 643p?

• The chart shows the Dunelm price action over the past month.
• Shares in a weeklong uptrend from 528p lows; now at 590p.
• Shares -17.8% from 2018 highs; +27.66% from 2018 lows; -14.7% year-to-date
• Recent Q1 results pleased investors (sales exceeded expectations and gross margin rose), setting off positive momentum.
• In the last 2 weeks, the shares have risen over 10%. Will this momentum continue?

Click to enlarge

Trading Dunelm – 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 Dunelm using a CFD, at the current price of 590p. To do this, you need £2,000.

Let’s assume Dunelm trend continues to 643p May highs (+9%). Your profit would be £900, 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. Dunelm 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.