Caterpillar Breaks Long-Term Downtrend

2020년 9월 28일

Industrial stocks remain underperformers thanks to the coronavirus recession. However, a few companies struggling before the crisis have started breaking out.

One of them was Deere. The animal spirits have also been at work in Caterpillar.

The first chart feature for CAT is a weekly downtrend in place since early 2018. This ran along the pre-covid high and into the August consolidation area of $135-140.



Next, the equipment maker’s recent low of $142.73 was just half a percent above its 50-day simple moving average (SMA). Speaking of the 50-day SMA, it rose above the 200-day SMA in early August – a “golden cross.”

Finally, CAT’s advanced despite poor monthly sales reports and warnings about the weak economy. But recent economic data, especially from China, have fueled some optimism.

Given the fact that stocks have started the week by jumping higher (“market order Monday?”), some traders may want to see CAT retest closer to $140. However, the daily and weekly charts could be signaling a longer-term breakout.

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