CME Breaks into Open Air Buy Zone to Continue Strong Uptrend

May 11, 2015: 10:02 AM CST

CME Group (CME) offered traders a breakout buy opportunity as the strong uptrend continued.

Shares now enter a “Green Zone” or “Open Air Pocket” which we can see on the Daily Chart.

Let’s see the levels, opportunity, and targets available to traders now:

The Daily Chart above highlights the $92.00 per share level as the 20/50 EMA Confluence Spot.

Buyers propelled price above this level Thursday and built on the bullish impulse with a Friday gap.

Today we’re seeing additional – expected – upside action thrust the stock higher to confirm the buy signal.

In general, the breakout above the $92.00 level sets in motion a possible swing all the way to the $100 prior high – or even above this key price pivot.

Note the positive momentum divergence at the end of April as shares faced a touch of a key level.

The “Higher Timeframe Support Level” plus “Lower Timeframe Positive Divergence” combination is one of my favorite swing trading set-ups.

Speaking of Higher Timeframes, here’s CME on the Weekly Chart with Bull Trend:

With the exception of mid-2014, shares have enjoyed a strong, confirmed, stable uptrend.

Note how the rising 20 week EMA (green) is an ideal buy-spot (inflection point) as price retraces toward this level.

Once again, we saw another retracement (in this case down from $100 toward $90) toward the rising 20 week EMA and the lower timeframe divergence at the higher timeframe key support level.

In terms of trade planning, shares could trade back toward the $100 level as the uptrend continues.

Otherwise, focus on the Daily Chart EMA level ($92) as an “Alternate Thesis” Breakdown, especially if shares surprise us with another break under $90.

Visit the Simpler Stocks intro webpage for a new eBook from my colleague John Carter:

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

1 Comment

One Response to “CME Breaks into Open Air Buy Zone to Continue Strong Uptrend”

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