Will Sports Direct continue falling, or will it rise again back to November high of 348p?

• Sports Direct shares have fallen 4.5% today.
• Sports equipment retailers shares down after brokerage Berenberg initiated coverage of the stock at a “Sell” rating.
• Analysts issued a target price of 270p.
• Berenberg also initiated coverage of rival JD Sports at “Buy”.
• Currently trading at 309p (at time of writing).
• Shares -50% from 2018 highs; +5.7% from 2018 lows; -44.2% year-to-date.
• Recent share price range: Oct lows 304p; Nov highs 348p.
• Can the stock recover to yesterday’s highs?
• Source: Dow Jones, Bloomberg, FT, Company News

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Trading Sports Direct – An Example

Let’s say you feel that the stock is a bargain and you think it could bounce back to recent highs of 348p. You decide to buy exposure to £10,000 worth of Sports Direct using a CFD, at the current price of 309p. To do this, you need £2,000.

Let’s assume Sports Direct recovers back to 348p November high (+13.3%). Your profit would be £1330, from your initial investment of £2000.

Conversely, let’s assume you open the above position, and place a stop-loss at 8% from the current price. Sports Direct falls 8% and hits your stop-loss. Your loss would be £800.

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