by Jim Woods | October 31, 2013 10:26 am
On Friday, Nov. 1, we will get Q3 earnings numbers from CBOE Holdings (CBOE). The Chicago Board Options Exchange, is the largest options exchange operator in the U.S. Thanks to the growing popularity of options trading, as well as the exchange’s popular CBOE VIX futures contracts, the CBOE has seen strong revenue and earnings growth over the past year.
CBOE’s growth has translated nicely into the stock’s price performance, which has surged nearly 70% over the past 12 months. In August, however, traders began taking profits, prompting a pullback and a consolidation in CBOE shares that lasted through early October.
Since early October, shares of CBOE have been on the march, with the stock breaching its 50-day moving average and nearly breaking out to new 52-week levels. Today, the stock trades a little above $49, just below its yearly highs.
Technically speaking, CBOE has formed a very nice “cup with handle” chart pattern. The cup here is the price action from about mid-August to early October, and the handle being the price action in the stock since early October. This is a very bullish pattern that essentially shakes out weak holders and sets the stock up for a continued move higher.
If CBOE can impress with Friday’s earnings, then owning shares today could give traders a nice bump heading into the remainder of the year. If you’re looking for a stock with a bullish chart pattern, a history of strong earnings — and one that’s also a favorite with traders — then check out CBOE before Friday’s report.
As of this writing, Jim Woods did not hold a position in any of the aforementioned securities.
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