Will Melrose Industries continue falling, or will it rise again back to 177p this week’s highs?

• Melrose Industries shares -9.2% this week; further -2.3% today.
• Trading close to mid-Jan 159p support zone.
• US-exposed turnaround specialist’s shares falling as US markets struggle.
• Now trades 161p (at time of writing).
• Shares -9% from 2019 highs; +4.5% from 2019 lows; -1.5% year-to-date.
• Can the stock recover to recent highs?
• Source: Dow Jones, Bloomberg, FT, Company News, AlphaTerminal

Click to enlarge

Trading Melrose Industries – An Example

Let’s say you feel that the stock is a bargain and you think could bounce back towards recent high of 177p. You decide to buy exposure to £10,000 worth of Melrose Industries using a CFD, at the current price of 161p. To do this, you need £2,000.

Let’s assume Melrose Industries recovers back to 177p last week’s highs (+9.9%). Your profit would be £990, from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 4% from the current price. Melrose Industries falls 4% and hits your stop-loss. Your loss would be £400.

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