Will Wetherspoons break lower, or will it rise back again to 1337p?

• The Wetherspoons trading range (1110-1337p) has developed since March.
• Shares bounced off support zone 3 times, most recently yesterday.
• Now trading 1148p (at time of writing).
• Will the pattern repeat itself, testing previous highs?
• Shares -15.1% from 2018 highs; +3.5% from 2018 lows; -8.8% year-to-date
• 7 Nov: Barclays says Wetherspoon to take short-term pain for long-term gain
• 7 Nov: Liberum says Wetherspoon’s glass half-full view is justified
• Source: Bloomberg, FT, Reuters, DJ Newswires

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Trading Wetherspoons – An Example

Let’s say you like the Wetherspoons range, you think it’s heading back towards 1337p again. You decide to buy exposure to £10,000 worth of Wetherspoons using a CFD, at the current price of 1148p. To do this, you need £2,000.

Let’s assume Wetherspoons rises back to the 1337p channel ceiling (+16.5%). Your profit would be £1650, 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. Wetherspoons 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.