Will Severn Trent break support, or will it rise again back to 1975p range ceiling?

• Severn Trent is in a narrowing range since October.
• Shares bounced 3 times from rising support. It is now at 1821p (at time of writing)
• Will the pattern repeat itself, shares testing previous highs?
• Shares -16.5% from 2018 highs; +9.3% from 2018 lows; -15.5% year-to-date
• 22 Nov: RBS says Severn Trent well-placed to cut costs after positive first half
• Source: Dow Jones, Bloomberg, FT, Company News, AlphaTerminal

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Trading Severn Trent – An Example

Let’s say you like the range, you think it’s heading back towards 1975p again. You decide to Buy exposure to £10,000 worth of Severn Trent using a CFD, at the current price of 1821p. To do this, you need £2,000.

Let’s assume Severn Trent rises back to 1975p (+8.4%). Your profit would be £846, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 3% from the current price. Severn Trent falls 3% and hits your stop-loss. Your loss would be £300.

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