Caterpillar Inc. manufactures and sells construction and mining
equipment, diesel and natural gas engines, industrial gas turbines, and
diesel-electric locomotives worldwide. The company's Construction
Industries segment offers construction machinery and related parts,
including backhoe, skid steer, multi-terrain, track-type, skid steer,
compact, and wheel loaders; track, wheel, and mini excavators;
track-type tractors; motor graders. Its Resource Industries segment
provides electric rope and hydraulic shovels, draglines, drills,
forestry products, highwall miners, off-highway and articulated trucks,
electric drive mining trucks, wheel tractor scrapers, compactors, mining
trucks, wheel dozers, paving products, tunnel boring and underground
mining equipment. The company's Power Systems segment offers
reciprocating engine powered generator sets; integrated systems for the
electric power generation industry. Its Financial Products segment
provides retail and wholesale financing alternatives for Caterpillar
equipment, machinery, and engines; offers property, casualty, life,
accident, and health insurance, as well as insurance brokerage services;
and purchases short-term receivables.
To review Caterpillar's stock, please take a look at the 1-year chart of CAT (Caterpillar, Inc.) below with my added notations:
CAT has created a simple chart pattern known as a symmetrical
triangle. Combining a down trending resistance (red) with an up trending
support (blue) forms the triangle pattern. As the support and
resistance converge on each other the pattern is created. Since there is
no true way to know which way the stock will break, most traders will
wait for the breakout or breakdown before entering a trade.
If CAT were to break to the downside, traders might want to wait to
see how the stock reacts to its 52-week low support at $80 (teal) before
going short.
The Tale of the Tape: CAT has formed a simple
symmetrical triangle. A trader could enter a long position on a break
above the down trending resistance (near $87) with a stop set under the
entry level. However, if CAT were to break below the trend line support
(currently near $82), a short trade could be entered with a stop above
the trend line.
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