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Possible Bearish Inside Day Candle Pattern Detected for Caterpillar (NYSE:CAT)

By Nick Russo

SmarTrend's candlestick scanner has spotted a possible bearish inside day candle pattern in Caterpillar (NYSE:CAT) based on the price action in the company's shares. Today's price range of $82.95 and $83.71 is within yesterday's high and low of the day. This trading action often signifies indecision by bulls and bears to drive prices higher or lower and often implies a possible change in trend. Owners of Caterpillar may want to consider a possible hedge in the event a pullback occurs. Look for confirmation in the next few trading days.

In the past 52 weeks, shares of Caterpillar have traded between a low of $56.36 and a high of $89.62 and are now at $83.05, which is 47% above that low price. Over the last five market days, the 200-day moving average (MA) has gone down 0.2% while the 50-day MA has advanced 1.0%.

Based on a current price of $83.05, Caterpillar is currently 17.8% above its average consensus analyst price target of $68.24. The stock should discover initial support at its 50-day moving average (MA) of $74.96 and subsequent support at its 200-day MA of $71.11.

Caterpillar Inc. designs, manufactures, and markets construction, mining, agricultural, and forestry machinery. The Company also manufactures engines and other related parts for its equipment, and offers financing and insurance. Caterpillar distributes its products through a worldwide organization of dealers.

SmarTrend recommended that subscribers consider buying shares of Caterpillar on July 12th, 2016 as our proprietary SmarTrend analytics indicated a new Uptrend was in progress when shares hit $79.12. Since that recommendation, shares of Caterpillar have risen 6.3%. We continue to monitor CAT for any potential shift so investors can protect gains and will alert SmarTrend subscribers immediately.

Keywords: bearish inside day candle Caterpillar

Ticker(s): CAT