AA
A range trading opportunity for you?
Will AA break lower, or will it rise back to 109p highs again?
- AA shares are trading in a 93-109p range since late -September.
- Bounced off support zone 5 times, most recently yesterday.
- Now trading 95.5p (at time of writing)
- Will the pattern repeat itself, testing previous lows?
- Shares -46.3% from 2018 highs; +37.7% from 2018 lows; -44.0% year-to-date
- 16 Sept: Jefferies says AA shares will recover alongside earnings
- 16 Sept: AJ Bell says AA may be en route to private-equity bid
- Source: Dow Jones, Bloomberg, FT, Company News
Click to enlarge
Trading AA – An Example
Let’s say you like the range, you think it’s heading back towards 109p again. You decide to buy exposure to £10,000 worth of AA using a CFD, at the current price of 95.5p. To do this, you need £2,000.
Let’s assume AA rise back to 109p (+14.1%). Your profit would be £1410, 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. AA 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.