Is this trend a good trading opportunity?

Will GlaxoSmithKline turn, or will it continue falling to April lows?

• The chart shows the GlaxoSmithKline price action since the beginning of October.
• Shares in a week-long downtrend; now at 1,467p.
• Shares falling since GlaxoSmithKline announced it will ease rules forbidding it to pay doctors to speak about its medicines.
• Previous rules were in place after bribery scandals in China in 2014, when GSK was fined £300m by Chinese regulators.
• Shares now -8.5% from 2018 highs; +20.2% from 2018 lows; +11% year-to-date
• Shares fell 4.2% in the past week. Will this negative momentum continue?

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Trading GlaxoSmithKline – 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 GlaxoSmithKline  using a CFD, at the current price of 1,467p. To do this, you need £2,000.

Let’s assume the GlaxoSmithKline trend continues to April low of 1,395p (-4.9%). Your profit would be £490, 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. GlaxoSmithKline shares rise 5% and hit your stop-loss. Your loss would be £500.

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