I'm fairly new to CMI, but have been looking at it since our Q1 2021 rotation into value has taken place.
Technicals:
On this chart, I have drawn 3 lines which represent significantly different timeframes to be aware of (from left-to-right on the chart):
1) COVID Trendline--this has been some pretty steady support since our COVID lows and represents to me a great buying opportunity for swing trades
2) Long-Term Trendline--this has been in place since 2007 as resistance. In COVID, we have clearly broken this bullish in Aug 2020 and back-tested it in Oct 2020. While we have definitively broken this line, it may be an important support level to consider if CMI and/or the broader market turn bearish and have another correction.
3) Short-Term Support--on 21 January we had a high of 252.71. Since then broke out to 277.09 and have retraced to 253.54, which I'm calling close enough to be a bounce and to indicate a potential support level. This ~250-255 range also encompasses some Fib retracement levels of the last big move. This range could be another good ST buy point for a swing trade.
On a separate note, I have drawn some purple rectangles to represent the previous swing-trade buying opportunities. Importantly in these areas, there are 3 technical indicators that line up: RSI reaches reasonable levels (~50), MACD is decreasing while the stock is horizontal, and the , these show cooling off MACD and RSIs, and the Stoch dips around 20. When all 3 of these align, the stock then breaks to the upside.
Now, our (1) COVID Trendline and (3) Short-Term Support are converging, and we may be at the start of a new 'purpose rectangle' range of consolidation. I may look to buy CMI in the 250s for a quick swing into the 270s, or could hold Long-Term. I'm just nervous that we will see the (1) COVID trendline break at some point and that we'll retrace to the (2) Long-Term Trendline. If I see more consolidation and if we get back to these levels (15-20% pull-back), then I'll be much more bullish for the long-term.
On the Fundamentals side of things:
- CMI is similar and has exposure to industrials that I'm interested in right now: DE, CAT (farming equipment) as well as CSX, UNI, NSC (railroads), and GM, F (autos). CMI makes engines which go in tractors, trains, and cars (more so trucks). It'll be a great infrastructure play without technically being infrastructure itself. Their 2% yield isn't something to complain about either.
- On the growth side, CMI is investing a lot in hydrogen, so they could be good comps to the likes of LIN, DOW, or a renewable utility such as BEP or NEE.
This is not an investment advice, do your own due diligence.
Technicals:
On this chart, I have drawn 3 lines which represent significantly different timeframes to be aware of (from left-to-right on the chart):
1) COVID Trendline--this has been some pretty steady support since our COVID lows and represents to me a great buying opportunity for swing trades
2) Long-Term Trendline--this has been in place since 2007 as resistance. In COVID, we have clearly broken this bullish in Aug 2020 and back-tested it in Oct 2020. While we have definitively broken this line, it may be an important support level to consider if CMI and/or the broader market turn bearish and have another correction.
3) Short-Term Support--on 21 January we had a high of 252.71. Since then broke out to 277.09 and have retraced to 253.54, which I'm calling close enough to be a bounce and to indicate a potential support level. This ~250-255 range also encompasses some Fib retracement levels of the last big move. This range could be another good ST buy point for a swing trade.
On a separate note, I have drawn some purple rectangles to represent the previous swing-trade buying opportunities. Importantly in these areas, there are 3 technical indicators that line up: RSI reaches reasonable levels (~50), MACD is decreasing while the stock is horizontal, and the , these show cooling off MACD and RSIs, and the Stoch dips around 20. When all 3 of these align, the stock then breaks to the upside.
Now, our (1) COVID Trendline and (3) Short-Term Support are converging, and we may be at the start of a new 'purpose rectangle' range of consolidation. I may look to buy CMI in the 250s for a quick swing into the 270s, or could hold Long-Term. I'm just nervous that we will see the (1) COVID trendline break at some point and that we'll retrace to the (2) Long-Term Trendline. If I see more consolidation and if we get back to these levels (15-20% pull-back), then I'll be much more bullish for the long-term.
On the Fundamentals side of things:
- CMI is similar and has exposure to industrials that I'm interested in right now: DE, CAT (farming equipment) as well as CSX, UNI, NSC (railroads), and GM, F (autos). CMI makes engines which go in tractors, trains, and cars (more so trucks). It'll be a great infrastructure play without technically being infrastructure itself. Their 2% yield isn't something to complain about either.
- On the growth side, CMI is investing a lot in hydrogen, so they could be good comps to the likes of LIN, DOW, or a renewable utility such as BEP or NEE.
This is not an investment advice, do your own due diligence.