Will Centrica break lower, or will it rise back again to 160p?

• The Centrica rising trading range has developed since early August.
• Shares bounced off rising support zone 9 times, most recently off 144p on Monday.
• Share price broken above 150p recent highs today.
• Now trading 151p (at time of writing).
• Will the pattern repeat itself, testing previous highs?
• Shares -9.2% from 2018 highs; +21.3% from 2018 lows; +10.4% year-to-date
• 31 Oct: The utility company appointed Charles Berry as new Chairman
• Source: Bloomberg, FT, Reuters, DJ Newswires

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Trading Centrica – An Example

Let’s say you like the Centrica range, you think it’s heading back towards 160p again. You decide to buy exposure to £10,000 worth of Centrica using a CFD, at the current price of 151p. To do this, you need £2,000.

Let’s assume Centrica rises back to 160p rising channel ceiling (+6%). Your profit would be £600, 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.