CBOE is one of the world's largest exchange holding companies, providing cutting-edge trading and investment solutions to investors. The company offers trading across a diverse range of products in multiple asset classes and geographies, including options, futures, US and European equities, exchange-traded products (ETPs), global foreign exchange (FX) and volatility products.
The stock is regarded as defensive because it performs relatively well in times of economic downturns or market volatility.
The stock price has formed an incomplete rising wedge pattern (see the red converging trendlines on the main chart as well as the insert), characterised by higher highs and higher lows which ultimately converge.
We expect the stock price to continue its upward trajectory and pierce the upper boundary of the pattern.
The stock is trading above its 200-day simple moving average of ~$121.50 -a bullish indicator.
Based on forward calculation of the Relative Strength Index (RSI) indicator, the stock will be overbought at $160.00, classifying our target price of $144 as realistic.
We suggest a low at-risk allocation for this trade.
Share Information
| Share code | CBOE US |
|---|---|
| Industry | Financial Services |
| Market capatalisation (USD) | 13.45 billion |
| One year total return | 13.71% |
| Return year-to-date | 1.76% |
| Current price(USD) | 127.18 |
| 52 weeek high(USD) | 132.01 |
| 52 week low(USD) | 103.82 |
| Financial year end | December |
| Closing paragraph | The stock holds beta of 0.50, suggesting lower volatility than the S&P500. This is a defensive trade. |
Consensus expectations (Bloomberg)
| FY22 | FY23E | FY24E | FY25E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 6.93 | 7.07 | 7.45 | 7.70 |
| Growth (%) | - | 2.08 | 5.27 | 3.37 |
| Dividend Per Share (USD) | 0.50 | 2.07 | 2.20 | 2.30 |
| Growth (%) | - | 314.40 | 6.23 | 4.27 |
| Forward PE (times) | - | 17.98 | 17.08 | 16.52 |
| Forward Dividend Yield (%) | - | 1.63 | 1.73 | 1.80 |
| Closing paragraph | Medium-term growth prospects are good, with a sharp increase in the dividend expected this year. | |||
Buy or Sell Rationale
Technical Analysis :
Long term fundamental view:
| Share Name and position |
BDRY - BUY (Continue to hold) |
XLK - BUY (Continue to hold) |
KR - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 9.05 | 139.66 | 46.91 |
| Current | 10.19 | 145.58 | 48.52 |
| Movement | 12.6% | 4.2% | 3.4% |
| Summary text |
The price is in an accumulation phase and is testing its 200-day simple moving average.
Our profit target remains at $12 with a trailing stop-loss at $9. We plan to exit the position on 21 June 2023. |
The price is testing the upper range of a declining channel pattern. The ETF remains above its 200-day simple moving average.
Our profit target is set at $156 with a trailing stop-loss at $139. Exit the position on 24 May 2023. |
The stock is trading above its 200-day simple moving average and the bullish trend is supported by continued upside momentum.
Our profit target remains at $52.00, with a trailing stop-loss of $46.20. We plan to exit the position on 7 June 2023. |
| Share Name and position |
AAPL - BUY (Continue to hold) |
ATVI - BUY (Continue to hold) |
MSFT - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 153.71 | 77.71 | 276.20 |
| Current | 158.93 | 79.68 | 277.66 |
| Movement | 3.4% | 2.5% | 0.5% |
| Summary text |
The price is retracing from the lower range of a linear regression channel pattern and remains above its 200-day simple moving average.
Our profit target is $170, and our trailing stop-loss is $150. Exit the position on 16 June 2023. |
The price is forming a symmetrical triangle pattern and remains above its 200-day simple moving average. It is also testing its 50% Fibonacci retracement level.
Our profit target is set at $84 with a trailing stop-loss at $76.8. Close the position on 30 June 2023. |
The price has breached a major resistance level and upward momentum is providing strong support for the bullish trend.
The profit target is $300, with a stop-loss of $259. Exit the trade by 9 June 2023. |
