Will Inchcape turn, or will it continue to rise beyond 700p?

• The chart shows Inchcape price action since late September.
• Shares  close to +19% in the past week, now at 590p (at the time of writing). Will this momentum continue?
• Shares -45.33% from 2018 highs; +15% from 2018 lows; -37.3% year-to-date.
• 31 Oct: Barclays says, that shares in car retailer Inchcape trade below what the company is worth given its high return on invested capital.
• Inchcape was at the top of sales cycles in all its markets after benefiting from FX tailwinds in from 2013 to 2017.
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

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

Let’s assume the Inchcape trend continues to 700p (+18.6%). Your profit would be £1860, 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. Inchcape 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.