CaterpillarLong
Preparing for a bullish come back
CAT is looking at a potential rebound after strong price action is showing some bullish action in the midst. Price action
The stock has broken out of the immediate over resistance after rebounding off the key 138.2% extension level of the previous diamond top pattern. Furthermore, there is a strong double test of the key support zone at 354-365 region.
Momentum
Long-term MACD's histogram remain negative, which is one of the key risk. However, mid-term stochastic Oscillator (62, 12, 12) is eyeing a potential oversold crossover.
The rate of change is still below the zero line but it has rebound from the bottom.
Volume is healthy. DM+ is sloping up, eyeing potential return of a bullish strength.
Potential Risk:
Most of the major momentum indicator have yet to be confirmed. However, long-term trend remain bullish since 2008. Furthermore, price action is bullish. But we scale in with lower lot sizes and leave the rest at 340 or 324 support for a rebound.
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