Will Babcock break lower, or will it rise back again to 633p?

• The Babcock trading range has developed since late-October.
• Shares bounced off 573p support zone twice, most recently today.
• Now trading 586.1p (at time of writing).
• Will the pattern repeat itself, testing previous highs?
• Shares -33.1% from 2018 highs; +1.6% from 2018 lows; -16.8% year-to-date
• 19 Sept: Babcock’s Avincis ‘may attract buyers’, says Jefferies
• 19 Sept: Babcock Backs FY expectations
• Source: Bloomberg, FT, Reuters, DJ Newswires

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Trading Babcock – An Example

Let’s say you like the Babcock range, you think it’s heading back towards 632p again. You decide to buy exposure to £10,000 worth of Babcock using a CFD, at the current price of 586.1p. To do this, you need £2,000.

Let’s assume Babcock rises back to 632p (+7.8%). Your profit would be £780, 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.