Market News & Analysis

CME Group bullish breakout holding above 200-day MA

Medium-term technical outlook on CME Group

click to enlarge charts

Key Levels (1 to 3 months)

Pivot (key support): 197.08

Resistances: 224.91 & 244.60/248.70

Next support: 161.40

Directional Bias (1 to 3 months)

Bullish bias above 197.08 key medium-term pivotal support for potential up move to retest the 224.91 current all-time high printed on 06 Sep 2019. A daily close above 224.91 reinforces the start of another impulsive up move sequence to target the next resistance zone at 244.60/248.70.

On the other hand, a break with a daily close below 197.08 invalidates the bearish tone for a corrective decline to towards the major support at 161.40.

Key elements

  • The 12% + decline from its 224.91 current all-time high has managed to stall at the 200-day acting as a support at around 197.08 that coincides with the former major swing high area of 19 Nov 2018.
  • Yesterday’s price action has staged a bullish breakout above a medium-term descending trendline from 06 Sep 2019 high. In addition, the daily RSI oscillator has staged a parallel bullish breakout after it has traced out a higher low. These observations suggest a revival of medium-term upside momentum.
  • The next medium-term resistance zone of 244.60/248.70 is defined by the upper boundary of a medium-term ascending channel from 22 Mar 2019 low and a Fibonacci expansion cluster.
  • The ratio charts of CME against the market (S&P 500) and its sector (Financials) are advocating outperformance of CME.
  • CME has a low beta value of 0.17 as measured against the S&P 500 has started to show positive elements, thus it can offer diversification benefits against current market risk such as U.S-China trade tension.
Charts are from eSignal 

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