CME Breaks into Open Air Buy Zone to Continue Strong Uptrend
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.
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Corey Rosenbloom, CMT
Afraid to Trade.com
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