Will Ocado break lower, or will it rise back to 868p highs again?

• Ocado shares are trading in 770-868p range since early October.
• Bounced from support zone 4 times, most recently this week.
• Now trading 770p (at time of writing)
• Will the pattern repeat itself, testing previous lows?
• Shares -34.2% from 2018 highs; +96.4% from 2018 lows; +93.9% year-to-date
• 13 Dec: Numis says Ocado not getting credit for technology success
• 19 Nov: Kroger investing $55m in first ‘shed’ in Cincinnati as part of Ocado’s first major US deal
• Source: Dow Jones, Bloomberg, FT, Company News, AlphaTerminal

Click to enlarge

Trading Ocado – An Example

Let’s say you like the range, you think it’s heading back towards 868p again. You decide to buy exposure to £10,000 worth of Ocado using a CFD, at the current price of 770p. To do this, you need £2,000.

Let’s assume Ocado rises back to 868p (+12.7%). Your profit would be £1270, 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. Ocado 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.