Will Greencore break lower, or will it rise back again to 225p?

• Greencore has developed a rising channel range since March.
• Bounced off rising support 4 times, most recently 2 weeks ago.
• Now trading 189p (at time of writing).
• Will the pattern repeat itself, testing previous highs?
• Shares -18.5% from 2018 highs; +58.7% from 2018 lows; -17.6 year-to-date.
• Greencore is a convenience foods manufacturer (sandwiches, salads, sushi, prepared meals)
• 15 Oct: Greencore sells US Business to Hearthside affiliate for £817m
• 15 Oct: Davy says Greencore to have lower growth, but higher returns after US exit
• 15 Oct: Jefferies says Greencore’s US exit could enhance value
• Source: Bloomberg, FT, Reuters, DJ Newswires

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Trading Greencore – An Example

Let’s say you like the Greencore range, you think it’s heading back towards 225p again. You decide to buy exposure to £10,000 worth of Greencore using a CFD, at the current price of 189p. To do this, you need £2,000.

Let’s assume Greencore rises back to 225p (+19%). Your profit would be £1900, 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. Greencore 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.