Q: How has CME.EC performed in the past, omitting repeat occurrences within 10 trading days, when, during the second quarter, it rallies 'big' to cross above its upper Bollinger band?
A: According to the 10 previous occurrences of this event, EventEdge indicates that CME.EC has shown a very strong bullish edge that peaks 29 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Wednesday, May 21, 2008) is Wednesday, July 2, 2008.
CME.EC rallies in 90% of the cases (9 of 10) by an average of 4.0% relative to the close on the event date. The average of the one decline is 0.3%. The overall return of the 10 cases is 3.5%, which, based on the close of CME.EC on the event date (1.5759), provides a target price of 1.6311.
To view this idea in our EventEdge analysis tool click here.
Note that we recently just published two bearish ideas on EC. The purpose of today's posting is not to refute the earlier ones, but just a cautionary note. See the links below to view the bearish ideas.
Ronish Patel is an analyst with MarketHistory.com.
Small Traders getting long the Euro - May 19, 2008
European Currency Futures - Rally as the Dollar Falls - May 19, 2008