Chicago Mercantile Exchange Stock Is in Breakout Mode

NEW YORK (TheStreet) -- Chicago Mercantile Exchange  (CME) was in full breakout mode on Wednesday. The stock gained over 2.35% with the help of a healthy jump in volume. CME finished the session well above its May high of $96.50 and within easy striking distance of the 52-week high of $100.61 set in March.

Shares are set up well for a run back up to March highs, but a consolidation may be needed before the $101 area is clearly taken out.

Following Wednesday's ramp, CME left behind a very solid layer of support. The $96.50 area held the May top as well as last week's high while the stock consolidated after the late April breakout.

This level is now a low-risk buy zone during a pullback. Considering the extent of the upside momentum during three of the last four sessions, CME may not need a pullback until after the 52-week highs are tested.

If CME is in need of a rest in the very near term, it is a buy on weakness. The stock has had a nice 11% move off the late April lows but remains well below an overbought moving average convergence/divergence reading. With a continued jump in interest rates, investors could potentially drive CME sharply higher. At some point in the not to distant future, the $100 area could develop into a major support zone.

Click here to see the below chart in a new window.

At the time of publication, Morrow was long CME.

More from Opinion

Trump Blinks on China Trade War That's Looking Harder to Win

Trump Blinks on China Trade War That's Looking Harder to Win

Monday Madness: GE, China, and Micron

Monday Madness: GE, China, and Micron

Attention 60 Minutes: Google Isn't the Only Big-Tech Monopoly

Attention 60 Minutes: Google Isn't the Only Big-Tech Monopoly

How Technology Will Unleash the Legal Marijuana Industry's Growth Potential

How Technology Will Unleash the Legal Marijuana Industry's Growth Potential

Apple Buys Tesla? Amazon Buys Sears? 3 Dream Mergers That Just Make Sense

Apple Buys Tesla? Amazon Buys Sears? 3 Dream Mergers That Just Make Sense