Plus500 back on track

Thursday, 15th August 2019 13:47 - by Rajan Dhall

Beleaguered financial broker Plus500 are back on track to meet their expectations for the full year. The whole sector has been plagued by over-regulation and a crackdown on offering too much leverage to inexperienced investors. Since the EMSA rulings the share price of the company has fallen from a high of 2076p to 397p between August'18 and April'19. Today the share price has retraced to around the 720 mark as the company restructures to work around the issues. 

Plus500 posted a net profit of USD 51.6mln for the first six months of 2019, down 56% from the last six months of 2018, and down 80% from the first six months in 2018. The improvement came when the Co. announced a USD 31mln interim dividend payout, 60% of net profit, as well as a USD 50mln share buyback programme. New Customers also rose as numbers in Q2 2019 were 23% ahead of levels seen in Q1 2019.

Looking at the weekly chart, there are two massive levels for me. The 780p level which we are approaching now and the 393-400p support. If the share price breaks 780p to the upside it will be a massive signal that investors will think that its business as usual at the broker after a turbulent time with the regulators. The volatility in financial markets is normally a good thing for brokers and with Brexit, Trump and trade wars there seems to be an ample amount of opportunities for punters to take advantage of. The indicators are also pointing to more bullishness to. The stochastics have again crossed to the upside and have enough space to reach the overbought zone and the MACD histogram looking positive too. Lastly, if there is a break to higher levels keep an eye on the volume to see if the market gets behind the move. 

The Writer's views are their own, not a representation of London South East's. No advice is inferred or given. If you require financial advice, please seek an Independent Financial Adviser.