Will Lancashire Insurance turn, or will it continue to rise beyond 2018 highs of 707p?

• The chart shows the Lancashire Insurance price action in October.
• Shares in a 8-week uptrend from 510p lows; now at 648p.
• Shares -8.65% from 2018 highs; +27.5% from 2018 lows; -5% year-to-date.
• 1 Nov: Insurance company reported that it narrowed its Q3 pre-tax loss after negative effects inflicted by natural disasters were much smaller than in the previous year.
• In the past 4 weeks, the shares have risen over 10%. Will this momentum continue?

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Trading Lancashire Insurance – 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 Lancashire Insurance using a CFD, at the current price of 648p. To do this, you need £2,000.

Let’s assume Lancashire Insurance trend continues to 707p (+9.1%). Your profit would be £910, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 3% from the current price. Lancashire Insurance falls 3% and hits your stop-loss. Your loss would be £300.

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