A range trading opportunity for you?

Will Babcock break support, or will it rise again back to 733p?

• The Babcock range has developed since late July.
• Bounced off 697p zone 8 times. Now trading 706p (at time of writing)
• Will the Babcock pattern repeat itself, testing previous highs?
• Shares -19% from 2018 highs; +16% from 2018 lows; +0.5% year-to-date
• Shares rallied after H1 trading update (19 Sept)
• 19 Sept: Jefferies says Babcock’s Avincis ‘May Attract Buyers’
• 18 Sept: Numis says Babcock stock ‘too far below’ peers
• Source: Bloomberg, FT, Reuters, DJ Newswires

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Trading Babcock – An Example

Let’s say you like the range, you think it’s heading back towards 733p again. You decide to buy exposure to £10,000 worth of Babcock using a CFD, at the current price of 706p. To do this, you need £2,000.

Let’s assume Babcock recovers back to 733p (+3.8%). Your profit would be £380, 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. Babcock 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.