In today’s Daily Stock Report, we are going to highlight Caterpillar Inc. (CAT). With a market capitalization of $222B, Caterpillar Inc. (CAT) is the world’s leading manufacturer of construction and mining equipment, off-highway diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives.
In the new era of electric vehicles (EVs) and sustainable energy, mining companies are emerging as the new oil wells, driven by skyrocketing global demand for industrial metals. This demand is essential for the high-tech world we live in and for the continued transition to electric vehicles. Such trends have created substantial opportunities for financial advisors looking to integrate mining and metals into their client portfolios.
For risk-averse investors who still want to participate in the burgeoning demand for these new-age miners, shares of CAT have become an appealing option. The technical picture for CAT is pointing toward significant growth. The SIA relative strength position chart for CAT in the SIA S&P 500 Index indicates a build of strength. It recently entered the favored zone on July 15 at $404.64 while yesterday’s closing price of the shares was $471.26 representing a 16.5% increase since SIA’s favored rating exemplifying the power of the SIA Algorithm. CAT currently resides in the 71st spot out of 505 in the SIA S&P 500 report.
In looking at the Candlestick Chart of CAT, we see the shares have been making new all-time highs when it broke above the $400 round number in July. A slight pullback occurred in August only to see the shares make a new higher high last week indicating the buyers seem to be firmly in control with the uptrend intact. Next resistance could be found at the $500 round number.
Taking a look at the Point and Figure chart on a 2% scale for an investment grade analysis, we see the shares found its footing after the April market correction with a very strong column of rising X’s lasting 23 boxes, until the shares paused to take a breather; with a 3-box reversal last month only to see the shares regain traction this month with a new higher high. Based on a measured move, next resistance will be at the $488.21 and, above that, $528.46. If the shares decide to take another breather, support is found at its 3-box reversal and prior resistance point of $433.52 and, below that, the $400 psychological round number. Impressively, the shares are exhibiting a bullish Double Top Pattern and has a positive SMAX score of 8 out of 10, underscoring its relative strength across all asset classes, not just within its peer group in the S&P 500.
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