Will Diageo break resistance, or will it fall back to 2688p?

• Rising Channel since Jan 2018
• Turned down from ceiling (3070p) to trade 3033p (at time of writing)
• Will the pattern repeat itself, falling back towards 2688p?
• Shares -0.8% from 2018 highs; +29.5% from 2018 lows; +8.5% year-to-date.
• 31 Jan: RBC says Diageo H1 results produced broad beat to consensus, more buybacks
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

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Trading Diageo – An Example

Let’s say you like the Diageo range, you think it’s heading back down to 2688p again. You decide to sell exposure to £10,000 worth of Diageo using a CFD, at the current price of 3033p. To do this, you need £2,000.

Let’s assume Micro Focus falls back to 2688p (-11.3%). Your profit would be £1130, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 4% from the current price. Diageo rises 4% and hits your stop-loss. Your loss would be £400.

This is provided for information purposes only. It should not be taken as a recommendation.