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TAKE PROFITS: HSBC (HSBA)

Close HSBC (HSBA)at market (1,235.2p)

HSBC has been a strong and steady performer for FTSE Investor, with the shares up around 70% since we first highlighted the opportunity. The rally has been driven by a combination of higher interest rates, solid earnings delivery and improved capital returns, all of which have helped restore confidence in the story. The shares are now trading close to their highs, momentum remains strong and the dividend yield is still attractive, but much of the re-rating has already taken place. At this stage, the stock is no longer obviously cheap and expectations are well set.

Flagging profits here is about discipline rather than a negative view on the business. After a long, steady run, the risk reward has become more balanced and future gains are likely to be harder won. With the shares priced for a continuation of good news, even modest disappointments could lead to a period of consolidation. Locking in gains allows us to bank a successful outcome for FTSE Investor while keeping HSBC on the watchlist should a more attractive entry point emerge later on.

Profit (excluding dividends):

Tranche 1 = +78.3%

Tranche 2 = +63.9%

HSBA Daily Candle Chart