Chicago Mercantile Exchange Holdings Is At Key Support

Chicago Mercantile Exchange Holdings (CME), a public exchange that trades futures contracts, has had a spectacular price upside. CME peaked at $553.22 on November 22, 2006, a 1,205.07 percent increase since January 2, 2003. Since the peak, the stock has declined and it now is at a key support level.

The chart of daily closes plotted on the log scale straightens the price pattern so you can see that CME is at the bottom of its upside price channel. If the stock falls below the lower boundary of the channel, it could continue to move lower. However, the chart shows that in the past CME has bounced off the lower boundary to move higher.

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Posted December 29, 2006.