Will Centrica break lower, or will it rise back again to recent highs?

• The Centrica rising range has developed since late July.
• Shares bounced 9 times off rising support zone, most recently yesterday off 145p.
• Now trading at 148p (at time of writing).
• Will the pattern repeat itself, testing previous highs?
• Shares -10.2% from 2018 highs; +20% from 2018 lows; +8.4% year-to-date
• Non-cyclical utilities like Centrica are benefiting from the recent market turbulence, as investors flock to safer assets.
• Centrica’s large 8.12% dividend yield is considered a solid investment in a bearish market.
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Centrica – An Example

Let’s say you like the Centrica range, you think it’s heading back towards 156p October highs again. You decide to buy exposure to £10,000 worth of Centrica using a CFD, at the current price of 1211p. To do this, you need £2,000.

Let’s assume Centrica rises back to 156p (+5.4%). Your profit would be £540, 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. Centrica 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.