Thomas Cook
Is this trend a good trading opportunity?
Will Thomas Cook turn, or will it continue to fall to 2013 lows of 38p?
- The chart shows the Thomas Cook price action since May.
- Shares in a 6-month downtrend from 149p May highs; now at 42p.
- Recent results were disappointing and further weakening in its performance could lead to liquidity concerns according to investment bank Berenberg (1 Oct).
- Shares -71.5% from 2018 highs; now trading at 2018 lows; -65.2% year-to-date.
- In the last week, the shares have fallen close to 16%. Will this momentum continue?
Trading Thomas Cook – 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 Thomas Cook using a CFD, at the current price of 42p. To do this, you need £2,000.
Let’s assume Thomas Cook trend continues to 2013 low of 38p (-9.5%). Your profit would be £950, 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. Thomas Cook rises 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.