Caterpillar Inc. is an American corporation which designs, manufactures, markets and sells machineryenginesfinancial products and insurance to customers via a worldwide dealer network. Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The first quarter of 2018 reported a 31% rise in sales and revenue. They have also repurchased $500 million of their own shares.

 

  • The death cross (negative) was confirmed when the short 10 week moving average (blue line) crossed through the longer 20 week moving average (red line). This is seen as negative.
  • The 10 week moving average tested the 20 week moving average but was not strong enough to break to the upside which is seen as negative.
  • Line A ($135-18) is a strong support and if this line doesn’t remain a support, things can get ugly.
  • The coppock indicator also couldn’t change the signal line into a support which is seen as negative.
  • The share is in oversold territory which means it can easily bounce from here but if the share doesn’t change line B ($155-23) into a support things can get ugly.
  • Above line B the falling wedge can take the share to a new record high of $178 should the formation play out.
  • A window is waiting between $138-98 and $139-12.
  • For traders – Buy above $136-58 but use $133-70 as stop loss to protect capital. The possible targets towards the top are $138-98, R139-12, $143-90 and $146-12.
  • For medium to long term investors – Use every rally in the share price to reduce exposure to the share as long as the 10 week moving average remains a resistance on the 20 week moving average.

Don't hesitate to ask if anything is unclear.

Frans & Christelle