Conclusion, Investment Implications, Strategy
Caterpillar Inc.(CAT) appears to be resuming its mid March advance following almost 3 months of sideways investor indecision. A sustained rise above the upper boundary of the indecision area, currently near $123.97, would target an eventual, additional 27% 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 price is currently breaking out higher from almost 3 months of sideways investor indecision from the mid March lows. A sustained rise above the upper boundary of the indecision area, currently near $123.97, would target an eventual, additional 27% rise to $160.30 per share.
Table 1
Table 1 below shows that, considering the aforementioned upside target and a protective stop placed below the $121.28 area, a long entry price of $126.10 would provide a 1:7.1 risk/reward ratio (risking $1.00 to make $7.10) with an initial risk of 3.8%.
Table 1
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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.