Will Drax continue falling, or will it rise again back to 403p this week’s highs?

• Drax shares -5% today (-7.5% this week) after Citi downgraded to Sell.
• 8 Feb: Energy company launched UK’s first carbon-capture project at biomass plant.
• Now trades 378p (at time of writing).
• Shares -4.6% from 2019 highs; +14.6 from 2019 lows; +4.7% year-to-date.
• Can the stock recover to recent highs?
• Source: Dow Jones, Bloomberg, FT, Company News, AlphaTerminal

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Trading Drax – An Example

Let’s say you feel that the stock is a bargain and you think could bounce back towards 403p recent highs. You decide to buy exposure to £10,000 worth of Drax using a CFD, at the current price of 378p. To do this, you need £2,000.

Let’s assume Drax recovers back to 403p this week’s highs (+6.6%). Your profit would be £660, 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. Drax 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.