Stock of the day: CME Group

This Tuesday we’ll be looking at CME Group. We’re returning to CME as the situation is very interesting and we’re currently one small step away from a proper sell signal.

CME is in a downtrend since February. At the end of April and beginning of May, CME managed to break two crucial supports. The first one was a horizontal one at around 220 USD (yellow) and the second one was a dynamic one (black, long-term up trendline). The breakout of those two gave us a strong signal and indeed, the price fell sharply.

In the second half of May and in June we saw a bullish correction. This correction is shaped like a flag (red lines) and managed to retrace the 38,2% of the recent drop. That resistance can be crucial for the mid-term situation on CME.

As long as it stays inside the flag pattern, the bullish correction continues, so does the mid-term positive sentiment. If the price breaks the lower line of the flag, it can be seen as a proper sell signal. In my opinion, there’s a high chance for this to happen.