The S & P 500 has just experienced its first 10% correction since last summer, with many other indices, ETFs, and individual stocks experiencing even steeper drawdowns. Few names have been spared. That’s why when a stock not only holds up well but also approaches a major technical breakout, it demands our attention. CBOE is one of those stocks. We first flagged it to clients on February 20, 2025 — the day right after the S & P 500 made its last all-time high. At the time, the stock still had work to do, and we emphasized that breakouts should never be anticipated before they actually happen. But keeping strong set-ups on our radar is always a smart move. Despite the broader market struggles over last four weeks, CBOE has continued to grind higher, showing notable relative strength. Now, after a month of steady progress, it’s attempting to break out of the pattern we’ve been watching. Holding above $215-zone would confirm the breakout, with an initial target in the $247 zone. CBOE is classified within the capital markets industry of the XLF Financial Sector ETF . The group, which is comprised of 19 stocks, has a big footprint within the sector, accounting for a 22% weighting. However, CBOE ranks just 17/19 and has a tiny 0.33% sector weight, easily making it one of the smallest components in the sector. Despite its size, CBOE consistently outperformed XLF from 2021 through late 2023. But given that it’s basically net flat since last August, it had noticeably lagged other financial stocks (until the last few weeks), many of which were making new highs as recently as this past February. Therefore, as discussed above, if CBOE now can break out on an absolute basis, the stock could also punch through its downward-sloping channel relative to XLF. Clearing that level would open the door for a resumption of the relative uptrend that began four years ago. Finally, this lifetime monthly chart of CBOE highlights a clear pattern — the stock’s most significant breakouts since its 2010 inception have consistently led to months of upside follow-through. While the weekly chart’s formation may seem large, it’s actually one of the smallest when viewed in the context of this longer-term perspective. Given this history, a successful breakout followed by continued upside wouldn’t be out of the ordinary. For this scenario to unfold soon, CBOE must first confirm its current breakout attempt. — Frank Cappelleri Founder: https://cappthesis.com DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
