CME Group, Inc. operates as a security and commodity exchange company. It provides the risk management and investment needs of customers around the globe. The company offers a wide range of products across various asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate.
Take a look at the 1-year chart of CME (NASDAQ: CME) below with added notations:
CME had been trending overall higher going into the fall of last year. However, the stock eventually stalled, as CME has now hit the same resistance at $220 (red) on two separate occasions. The stock has recently pulled back from $220, but a solid close above that mark should lead to another leg higher for CME.
The Tale of the Tape: CME has a 52-week resistance at $220. The possible long position on the stock would be on a breakout above that level with a stop placed under it.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT