Conclusion, Investment Implications, Strategy

An emerging major bullish trend change in Caterpillar Inc.(CAT) targets an additional 20% rise to $160.30 per share.   This is an Asbury Momentum idea.

Analysis and Rationale

Caterpillar Inc.(CAT) manufactures and sells construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. The company was formerly known as Caterpillar Tractor Co. and changed its name to Caterpillar Inc. in 1986. The company was founded in 1925 and is headquartered in Deerfield, Illinois.

Chart 1 below plots CAT daily since December 2019 and shows that, following an initial breakout higher from investor indecision on June 3rd, the stock is now consistently trading above its 200-day moving average (major trend proxy).  This suggests an emerging major bullish trend change and targets an additional 20% rise to $160.30 per share.

Chart 1

Table 1 below shows that, considering the aforementioned upside target and a protective stop placed below the $130.21 area, a long entry price of $133.68 would provide a 1:7.7 risk/reward ratio (risking $1.00 to make $7.70) with an initial risk of 2.6%.

Table 2


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