Will Sainsbury continue falling, or will it recover to 236p?

• Sainsbury -18% from April highs; Now trading 195.6p (at time of writing).
• Shares -3.3%, down less than the 3.9% dividend it paid
• Can the stock recover 20% to 236p April highs?
• Shares -34% from 2019 highs, +1.2% from 2019 lows; -26.2% year-to-date.
• 21 May: Core profitability hidden by Argos synergies says Shore Capital
• Source: Dow Jones, Bloomberg, FT, Company News, AlphaTerminal

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Trading Sainsbury – An Example

Let’s say you feel that the stock is a bargain and you think could bounce back towards 236p. You decide to buy exposure to £10,000 worth of Sainsbury using a CFD, at the current price of 195.6p. To do this, you need £2,000.

Let’s assume Sainsbury recovers back to 236p (+20%). Your profit would be £2000, 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. Sainsbury 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.