A range trading opportunity for you?

Will Elementis break lower, or will it rise back again to 250p?

• The Elementis range has developed since mid-July.
• Bounced off 220p support zone 5 times. Now trading 224p (at time of writing).
• Latest leg lower due to stoppage at Castle Hayne chromium facility in the US due to Hurricane Florence (26 Sep).
• There’s been no “significant structural damage” and the stoppage is expected to have only “modest” impact on revenue, supporting a bounce back from lower range boundary.
• Will the pattern repeat itself, testing previous highs?
• Shares -24% from 2018 highs; +2.8% from 2018 lows; -14.8% year-to-date
• Source: Bloomberg, FT, Reuters, DJ Newswires

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Trading Elementis – An Example

Let’s say you like the Elementis range, you think it’s heading back towards 250p again. You decide to buy exposure to £10,000 worth of Elementis using a CFD, at the current price of 224p. To do this, you need £2,000.

Let’s assume Elementis rises back to 250p (+11.6%). Your profit would be £1,160, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 8% from the current price. Elementis falls 8% and hits your stop-loss. Your loss would be £800.

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