Bull Signal Could Push Financial Services Stock Higher

CME just pulled back to a historically bullish trendline

Deputy Editor
Dec 6, 2023 at 1:03 PM
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Financial services stock CME Group Inc (NASDAQ:CME) is 1.9% lower to trade at $214.21 this afternoon, pulling back from its Dec. 4, 19-month high of $223.80. Despite a 2.5% deficit in December, a historically bullish signal flashing on the charts could -- if past is precedent -- rectify this minor setback.
 

According to Schaeffer’s Senior Quantitative Analyst Rocky White, CME Group stock is within one standard deviation of its 50-day moving average for the eighth time in the past three years. Following the last seven signals, the stock was higher one month later 86% of the time, averaging a 3.1% return. A move from its current perch would have CME reclaiming those multi-year highs.

CME December 52023

A shift in the options pits could create additional tailwinds for the shares, as short-term traders are more bearish than usual. This is according to CME's Schaeffer's put/call open interest ratio (SOIR) of 1.18 that ranks in the 90th percentile of annual readings.
 
It's also worth pointing out that the stock ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of just 3 out of 100. In other words, the security has consistently realized lower volatility than its options have priced in, making the stock a potential premium-selling candidate.
 

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