Caterpillar Crawls to New HighsIndustrial stocks have outperformed in recent months as investors shift toward cyclicals. Today’s chart focuses on Caterpillar, a potential beneficiary of infrastructure spending in the U.S. and a recovery in China.
The first patterns are the pair of highs from the last two years. CAT challenged $237.90 (the peak from April 2022) several times in November before breaking through in December. The stock bounced at the same level early this year, which may suggest old resistance is new support. (See the small white arrows on the chart.)
Next is the June 2021 high of $246.69. Prices jumped through that level to a new high on Friday. They retested on Monday and are trying to hold it today. (Additionally, the weekly chart had a bullish outside candle.)
You also have a gap higher on October 27 after earnings and revenue beat estimates. Four weeks later, the 50-day simple moving average (SMA) had a “golden cross” above the 200-day SMA.
Finally, MACD has turned positive again after a month of declines.
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CAT trade ideas
WThis appears to be a Shark .
Valley 2 is lower than valley 1.
Current high is 239.85.
ES 230.50
Short when entry level met.
No recommendation
CAT - 9 lives, 1 left CAT sitting on the front steps of a very dangerous channel where historically we have seen blowoff tops and waterfall selling anytime we're here....
.... Complacency?
Tim's TradingView Fundamentals ChartHere's what I like to plot using the great charting tools available at TradingView:
1. Free Cash Flow
2. Price to Sales Ratio (PSR)
3. Average Basic Shares Outstanding
4. Long Term Debt (excl lease liabilities)
5. Total Revenues
6. Market Cap
From this I can assess how the structure of the company has changed over time.
For example: Did the company go into more debt over the last 5-10 years and reduce shares outstanding? If so, are they generating higher Free Cash Flow (FCF) overall as a percent of the market valuation (mkt cap)? I like to see the stability or growth in revenues overall and the valuation that the market is placing on the shares of the company. If you look at enough companies, you can see what the market is paying for and decide what you might be willing to pay for any company you are studying.
Sales growth can help cover up a lot of trouble from having a lot of debt, which seems obvious. A lack of sales growth can destroy any chances of ever being able to pay off debt or increase dividends, which means you wont pay as much for a company.
Looking at $CAT here: Compare to 2007 and you can see that debt is up $9 billion, Free Cash Flow is flat, shares outstanding are down 15%, and YET the stock valuation has TRIPLED over that time frame, which doesn't make a lot of sense to me.
🟨 2023 WATCHLIST: $CAT2023 WATCHLIST
A series of stocks that i will be monitoring at the beginning of 2023
Here is a new issue from the Construction/Mining Industry.
Relative Strength (IBD): 95
Sales acceleration:
Jun-22: 11%
Sep-22: 21%
Funds acceleration:
Jun-22: 2652
Sep-22: 2558
$CAT is not invincible Nice Short opportunity coming at top of MEGAPHONE pattern on the weekly (invalidated with a break over 249.10)
$CAT, MOON ITCaterpillar breaking out of it's bullflag today shows that it wants to test all time highs again.
If we reject all time highs (white line), short it.
If we break through, look for us to make our way into the golden zone up above.
CAT - Long OpportunityTechnical:
- Cup and handle breakout pattern has formed and is playing out
- Price is holding up well above 200 EMA
- Strong uptrend is confirmed. As long as price is above 200 EMA, will continue holding.
Fundamentals:
- Catalyst may be the reopening of Chinese economy boosting demand for energy and natural resources, which in turns boost demand for industrial and mining machineries
- Boost from the recent infrastructure bill and the Inflation Reduction Act
I see this as a stock that I can hold for 2023 or longer, as stock is on the uptrend. Will only consider exiting if price breaks below 200 EMA and a change in trend is confirmed.
Where is the sell signal - Shorting This has followed the major indices and I expect it to reverse as they dump. #not trading advice.
CAT - Setting up nicelyNeed to watch CAT closely next week. I am waiting for it to tighten more near pivot. it is showing good relative strength.
CAT short ( Trend Line Break)CAT short below $230 (trend line break) to fill the major gap at $207. started to loose momentum already could still have a lil more room to the upside though. If she cannot fully break above AND hold $240 ill be looking for a return to $200. Simple
Analyzing CatI see a conflicting all time high here versus Think or Swim. On TOS, the all time high is 246.69. (I draw here but I also use TOS) Sometimes data conflicts and this is one of those times.
To me this is rather data, so I will google what the actual all time high is.
I do not think one would argue the fact that there is a big W on this chart. Ws are known to reverse when they find their target.
So far, the 4th leg of the W has hit right above the 1.113. Nothing says it has to stop here, but since valley 2 is lower than valley 1, it does narrow down the patterns this could be.
Price has long passed the .786, so it is not a Cypher. The Nen-Star terminates near the 1.272 as a rule. If price does not go much higher than where the leg is now, it could be an alternate Shark as this pattern can reverse at the .886 or the 1.113.
The 2nd leg pulled up to the .5 of the 1st leg down so is of no help in differentiating the patterns.
Price bounced back up at the 50% mark of the trend up.
Price is above the .236 of the long trend up since the covid low.
I guess things can be worth a whole lot more during a looming recession than during a pandemic. Dunno.
No recommendation.
Wide gap up well below price with plenty of pockets pivots to provide support so if, or when price falls, it may stall here.
Possible M forming.
CAT this is a keeperCAT is forming a bullish flag in the monthly timeframe since February 2021, this is long term trade, more like an investment. I keep it in my long term portfolio, and it gives out dividends. I'm going to hold this one for years, just enjoying the dividends while is going up.
Possible leg up or downCAT can possibly just make a double top. The 3Month looks like it has the potential to pump it up a bit more. Looks like it might print a green dot on the Oscillator the Vwap is going up. Its also creating minor bearish divs on the 3 month. The weekly looks like it could print a bearish div on the Oscillator money flow looks week too. As traderes we should be ready for both scenarios. If you long make sure to take profits 10% on the way up. Id wait for a better short entry if you have the balls to short this trend of course.
Bullish Idea Practicing Manually trading with my indicatorTrading testing my indicator below. This is for educational or entertainment only.
CAT - short, only 3.8% from ATH 246.69NYSE:CAT currently at 235.70 traded 160.60 - 239.85 in 52 week range, only 3.8% from ATH 246.69, which is overvalued considering risks of a global recession. Recently dumped by Bill & Melinda Gates Foundation Trust - they increased their position in NYSE:DE .
Data:
Market Cap: $122.66B
P/E GAAP (TTM) - 17.13
Price/Book (TTM) - 7.87
FINRA Short Volume Ratio 60.47%
RSI 1D: 69.91
MACD 1D: bearish
Case against:
Strong earnings for FQ3 2022 (Sep 2022): Non-GAAP EPS of $3.95 beats by $0.79, revenue of $15B beats by $620M
Seeking Alpha Quant: Strong Buy 4.94
W Bottom to Momentum Run Example: CATWeekly Chart of CAT: this is one of the Dow components that is nearing its previous all-time high resistance levels. It is one of the first few Dow 30 stocks to challenge prior all-time high prices.
Caterpillar Inc. has been running with momentum that will now pause or stall at this level. Now, watch to see which support level holds as profit-taking continues.
This is NOT a trading range but an intermediate-term correction ending with a W bottom. Important to note the differences. A bottom after a correction tends to set up for momentum runs that can sustain longer than they do within a trading range.
CAT4HR RSI broke down along with price TL. Weekly RSI went up rather quickly and so did daily. Looking for a pull back to the first golden pocket and then maybe the 200 moving average if it dumps that hard.
CAT ShortCAT is up about 50% from its September low. Earnings also booth their performance, they are almost reached their all-time high. I think that CAT will retest EMA below to take a breath. I grabbed some puts for this underlying
MEOW !!!CAT INVESTMENT PLAN
Caterpillar, Inc. engages in the manufacture of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. It operates through the following segments: Construction Industries, Resource Industries, Energy and Transportation, Financial Products, and All Other. The Construction Industries segment supports customers using machinery in infrastructure and building construction applications. The Resource Industries segment is responsible for supporting customers using machinery in mining and quarrying applications and it includes business strategy, product design, product management and development, manufacturing, marketing, and sales and product support. The Energy and Transportation segment supports customers in oil and gas, power generation, marine, rail, and industrial applications. The Financial Products segment offers a range of financing alternatives to customers and dealers for caterpillar machinery and engines, solar gas turbines, as well as other equipment and marine vessels. The All Other segment includes activities such as the business strategy, product management and development, and manufacturing of filters and fluids, undercarriage, tires and rims, engaging tools, and fluid transfers. The company was founded on April 15, 1925, and is headquartered in Deerfield, IL.
SENNASEASON
I DONT SHARE MY REASONS JUST FORECASTS
