This 43% gain tells you why I keep coming back to CME
Chicago Mercantile Exchange (CME) is a stock
that I have traded on and off throughout the year due to its excellent
fundamentals and its price action. Stocks that typically trade over $200 with
strong fundamentals can have big swings in price movement and if you are patient
and pick your spots right, you can make a lot of money.
CME attracted my attention because it was just a stone’s throw from its all time
high and was testing minor support while in a uptrend–see point 1 on 4-4-06.
CME was in a uptrend and the inside bar that formed at point 1 indicated to me
that the price was consolidating after a brief decline at minor support near its
all time high on 4-04. The following day on 4-05-06 price rallied briefly above
the high on 4-04-06, triggering a buy trade and I bought the CME May 470 calls
and placed a mental stop below the swing point low made on 4-03-06.
The following day, CME closed in the upper end of its daily range and the
following day had a huge opening gap of over 11 points and specialists were
frantically trying to satisfy demand for the stock and delayed the trading for
CME for 20 minutes while the rest of the market was open for business at point
2.
I sold my calls into the strength of the upward surge in the stock and cashed
out at a 43% profit per option or around $1590 per option before commissions.
I have found that by finding fundamentally strong stocks that match certain
criteria for explosive growth and then trading them technically can lead to
explosive profits. CME is a good example of that.
Good Trading,
Billy Williams
www.stockoptionsystem.com