Will Whitbread turn, or will it continue to beyond 2018 high of 4800p?

• The chart shows the Whitbread price action since late September.
• Shares in a weeklong uptrend from 4287p October lows; now at 4673p.
• Shares -2.4% from 2018 highs; +30% from 2018 lows; +17% year-to-date.
• Recent sale of Costa Coffee to Coca-Cola should leave a surplus of £2.6 billion after paying down debt and topping up a pension deficit.
• Whitbread said it intends to return the majority of that cash to shareholders, which could benefit the share price.
• Some of the remaining proceeds could be used for new acquisitions to gain new strategic brands.
• In the past week, the shares have risen over 7%. Will this momentum continue?
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Whitbread – 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 Whitbread using a CFD, at the current price of 4673p. To do this, you need £2,000.

Let’s assume Whitbread trend continues to 2015 high of 5472p (+17%). Your profit would be £1700, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 8% from the current price. Whitbread falls 8% and hits your stop-loss. Your loss would be £800.

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