Will CATERPILLAR INC breakout?

Our stock screener has spotted CATERPILLAR INC (NYSE:CAT) as a possible breakout candidate. A technical breakout setup pattern occurs when the stock is consolidating after a nice uptrend. Whether the actual breakout occurs remains to be seen of course, but it may be interesting to keep an eye on NYSE:CAT.

Technical analysis of NYSE:CAT

ChartMill assigns a Technical Rating to every stock. This score, ranging from 0 to 10, is updated daily and is determined by evaluating multiple technical indicators and properties.

Taking everything into account, CAT scores 10 out of 10 in our technical rating. This is due to a consistent performance in both the short and longer term time frames. Also compared to the overall market, CAT is showing a nice and steady performance.

• The long and short term trends are both positive. This is looking good!
• Looking at the yearly performance, CAT did better than 94% of all other stocks. We also observe that the gains produced by CAT over the past year are nicely spread over this period.
• CAT is part of the Machinery industry. There are 133 other stocks in this industry. CAT outperforms 89% of them.
• CAT is currently trading in the upper part of its 52 week range. The S&P500 Index is also trading in the upper part of its 52 week range, so CAT is performing more or less in line with the market.
• In the last month CAT has a been trading in the 268.80 - 289.41 range, which is quite wide. It is currently trading in the middle of this range, so some resistance may be found above.

For an up to date full technical analysis you can check the technical report of CAT

How do we evaluate the setup for NYSE:CAT?

In addition to the Technical Rating, ChartMill provides a Setup Rating for each stock. This rating, ranging from 0 to 10, assesses the extent of consolidation in the stock based on multiple short-term technical indicators. Currently, NYSE:CAT has a 9 as its setup rating:

CAT has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately. A pullback is taking place, which may present a nice opportunity for an entry. There is a resistance zone just above the current price starting at 286.26. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 278.95, a Stop Loss order could be placed below this zone. Another positive sign is the recent Pocket Pivot signal.

How can NYSE:CAT be traded?

One way to play this would be to wait for the actual breakout to happen and buy when the stock breaks out above the current consolidation zone. A possible place for a stop loss would be below this zone.

Of course, there are many ways to trade or not trade NYSE:CAT and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.

Our Breakout screener lists more breakout setups and is updated daily.

Disclaimer

This article should in no way be interpreted as advice in any way. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.