CBOE: A Trading Breakout

12/08/2016 7:00 am EST


Leo Fasciocco

Investment Columnist and Publisher, Ticker Tape Digest

Our latest featured stock is a company that handles futures contracts, as well as equity options, options on various market indexes and options on exchange-traded products, explains technical expert Leo Fasciocco, editor of Ticker Tape Digest.

CBOE Holdings (CBOE) has broken out from a cup-and-handle base; the stock got a boost from an upgrading by JP Morgan Securities.

The recent breakout comes with a bullish widening of the daily spread. The momentum indicator is strongly bullish.

This year analysts are forecasting to be down 2% to $2.36 a share from $2.40 a year ago. Net for the upcoming fourth quarter should be down 4% to 57 cents a share from 59 cents a year ago.

The highest estimate on the Street is at 62 cents a share. So, there is a chance for higher earnings.

For 2017, they predict an 11% rise in net to $2.61 a share from the anticipated $2.36 this year.

CBOE is a speculative breakout play due to its "soft earnings growth." However, we are looking for the stock to rise to $80 off this breakout. A protective stop can be placed near $68.

Institutional sponsorship is excellent. Seven funds that are rated 5-star hold CBOE. The largest fund holder is 5-star rated T. Rowe Price Mid-Cap Growth Fund with a 4.9% stake.

The largest buyer recently was the 5-star rated Fidelity Puritan Fund, which purchased 522,500 shares.

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