Will Drax break support, or will it rise again back to 445p?

• The Drax rising channel range has developed since May/June.
• Bounced off rising support 7 times, most recently this week.
• Currently trading 396p (at time of writing)
• Will the pattern repeat itself, testing previous highs?
• Shares -9.7% from 2018 highs; +79.2% from 2018 lows; +46.5% year-to-date
• 3 Dec: £702m acquisition of Scottish Power amended for risk of lower 2019 government capacity payments
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

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Trading Drax – An Example

Let’s say you like the range, you think it’s heading back towards 445p again. You decide to buy exposure to £10,000 worth of Drax using a CFD, at the current price of 396p. To do this, you need £2,000.

Let’s assume Drax recovers back to 445p (+12.3%). Your profit would be £1230, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 5% from the current price. Drax falls 5% and hits your stop-loss. Your loss would be £500.

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