CME Group (CME) saw its shares drop to back to back closes below its lower Bollinger band on Monday as the stock has lost value on six of the last eight trading days and -9.8% in the last five trading days to close Monday at $412.10. During the day on Monday, the stock came within cents of its low for the year just below $400. This event has been very bullish for the stock in its first few years of existence, will the trend continue?
Q: How has CME responded to back to back closes below its lower Bollinger band?
A: According to the 11 previous occurrences of this event omitting any repeat occurrences within 10 trading days, EventEdge indicates that CME has shown a very strong bullish edge that peaks 13 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Monday, June 2, 2008) is Thursday, June 19, 2008.
CME rallies in 91% of the cases (10 of 11) by an average of 7.8% relative to the close on the event date. The average of the one decline is 0.1%. The overall return of the 11 cases is 7.1%, which, based on the close of CME on the event date ($412.10), provides a target price of $441.36.
To see this in EventEdge® click here.
HYPERLINK "http://www.markethistory.com/staff/detail.html?s=mickey" Mickey Schoenhals is an analyst with Markethistory.com.
