Is it irrelevant, or will the Upgrade make the Anglo American share price more attractive?

• The chart shows the Anglo American share price since late June.
• Twin broker upgrade today.
• AlphaValue upgraded to Add, setting the target at 1832p.
• Global Mining Research upgraded to Hold, setting the target at 1600p.
• Consensus summary: 19 Buys, 9 Holds, 3 Sell; Average target: 1907p (Source: Bloomberg).
• Current share price 1660p (at time of writing).
• Will the shares turn back, or will the upgrade push the shares back towards 1786p September high?
• Shares -13.8% from 2018 highs; +17.1% from 2018 lows; +7.8% year-to date
• 24 Oct: Anglo American-Hindustan zinc merger would help balance Sheet: Jefferies
• 23 Oct: Anglo American earnings consensus to edge higher: Citi
• Source: Bloomberg, FT, Reuters, DJ Newswires

Click to enlarge

Trading Anglo American – An Example

Let’s say you think that Anglo shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Anglo using a CFD, at the current price of 1660p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Anglo share price rises to 1786p (+7.5%). Your profit would be £750 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. Anglo shares fall 3% and hit your stop-loss. Your loss would be £300.

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