Does this Upgrade present an opportunity for you?

Is it irrelevant, or will the Upgrade make the Direct Line share price more attractive?

• The chart shows Direct Line’s share price movements since March.
• Shares -16.6% from 2018 lows; +3.7% from 2018 highs; -13.3% year-to date
• JPMorgan upgraded Direct Line to Overweight (from Neutral), and reiterated its 395p target.
• Consensus summary: 11 Buys, 8 Holds, 0 Sell; Average target: 389p (Source: Bloomberg).
• Current share price 332.5p (at time of writing).
• Will the shares turn back, or will the upgrade push the shares back towards 393p March highs?

Click to enlarge

Trading Direct Line – An Example

Let’s say you think that Direct Line shares have upside potential as result of this broker upgrade. You decide to buy exposure to £10,000 worth of Direct Line using a CFD, at the current price of 332.5p. To do this, you need £2,000.

For the purpose of this example, let’s assume the Direct Line share price rises to 393p August highs (+18.2%). Your profit would be £1820 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. Direct Line shares continue their July downtrend, they fall 5% and hit your stop-loss. Your loss would be £500.

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