Stock of the day: CME Group

Tuesday brings us an analysis of the CME Group. We’d previously mentioned this instrument on January 25^th and back then, we were bullish. This is how we explained our view at the time:

“In fact, the price bounced from a crucial support yesterday. This support is an area below 220 USD (green), which in May and June 2021 was a strong resistance. This area proved to be efficient throughout November, December and January, so it was no surprise that it held as well yesterday.”

Back then, the price was around 224 USD, and almost straight away, CME’s price climbed higher to reach the 257 USD mark on the February 9^th. Great call if you ask me.

Since then, CME has entered a correction phase. The price dropped and managed to break the 232 USD support (orange), which is now the closest resistance.

What does the situation look like now?

CME is currently in a short-term sideways trend below the resistance on 232 USD and the support on the 218 USD (green). The way price action traders normally operate here is they’ll buy when the price breaks the resistance (232) or sell when the price breaks the support (218). We have all the reasons to believe that this strategy may also be effective here. But as always, only the near future will verify that approach.