Trade of the Week: The Persimmon Precipice

You shouldn’t try to catch a falling knife, right? So it would have been dumb to have bought into housebuilder Persimmon on Thursday last week when it suffered the price-drop shown at the end of this InterTrader chart:

Trade of the Week: The Persimmon Precipice
Except that this is what happened next (it bounced right back):
Trade of the Week: The Persimmon Precipice

It means that within a day you could have made a £100 profit for every £1-per-point staked, as demonstrated by this account snapshot.

Persimmon Result

Although this could have made a very nice day trade, my inclination (as usual) is to hold for a longer-term position trade. In this respect, the guaranteed stop order (to be trailed upwards if the price keeps rising) will guarantee a profit of at least £38 per £1-per-point staked…minus the cost of the guarantee, of course.

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Disclaimer: this posting is for general education only; it is not trading advice.