Is it irrelevant, or will the Upgrade make the Cairn Energy share price more attractive?

• The chart shows the Cairn Energy share price since August.
• Investec upgrades Cairn Energy to Buy, setting the target price at 190p.
• Consensus summary: 17 Buys, 5 Holds, 0 Sell; Average target: 258p (Source: Bloomberg).
• Current share price 165.3p (at time of writing).
• Shares -2.6% from 2019 highs; +9.9% from 2019 lows; +10.1% year-to date
• Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Click to enlarge

Trading Cairn Energy – An Example

Let’s say you think that Cairn Energy shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Cairn Energy using a CFD, at the current price of 165.3p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Cairn Energy share price rises to 209.5p November high (+26.7%). Your profit would be £2670 from your initial investment of £2,000.

Conversely, let’s assume you open the above position, and place a stop-loss at 9% from the current price. Cairn Energy shares break lower, they fall 9% and hit your stop-loss. Your loss would be £900.

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