Caterpillar Inc. (NYSE: CAT) is one of the world’s leaders in the field of building construction machinery and equipment. Because CAT has a strong presence in the Construction, Resource, Energy and Transportation industries, the company’s performance is heavily monitored, as it gives a rough view of how those sectors are performing. Today, CAT delivered their quarterly results and earnings per share, which came out at $2.55 against expected $2.98. Still, that shouldn’t disappoint investors, as the company is still positioning itself for future growth.
From the technical side, the Caterpillar stock is currently trading above its short-term upside support line drawn from the low of the 26th of December. On Friday, the share price was pushing higher, but failed to close above the key resistance area at 137.71, marked by the high of the 18th of January. That said, because the price structure shows that the stock keeps on making higher lows and higher highs, in our view, the 137.71 barrier might not stand a chance in withholding the possible future price-rise. That is why we will target higher levels, at least for a while more.
A break above the aforementioned resistance area, at 137.71, could push the stock further up, where the next potential price-target could be seen at 141.74, marked by the highest point of December. CAT might stall near that area, or even retrace back down for a bit, but as long as the price remains above the previously-mentioned upside support line, we will continue aiming higher. If the buying interest remains, the share price could climb back up and if this time the up-move leads to a break of the 141.74 barrier, this may clear the path towards the 143.87 hurdle, marked by the high of the 16th of October.
Looking at our oscillators, the RSI and the MACD, both are somewhat in support of the above-discussed scenario. The RSI is above 50 and still points to the upside. The MACD, already positive, has just crossed above its trigger line, and is also pointing higher.
Alternatively, if the CAT price suddenly drops below the above-mentioned short-term upside support line and the 133.43-dollar price tag, this could make investors worry, as the stock could slide further. This is when we will examine the 129.00 obstacle, as the next potential support zone, which if broken, may open the door towards lower levels. The 126.87-dollar price area could then be seen as the short-term potential target for the stock.
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