Caterpillar’s High Basing Pattern
Caterpillar began the year with a strong rally before entering an extended pause. But now some traders may think the Dow Jones Industrial Average member is ready to start moving again.
The first pattern on today’s chart is the low in June, the lower low in August and this month’s higher low. That’s a potential high basing pattern that may suggest new support has been established after a period of consolidation. It’s also noteworthy to see that occur above the previous highs from 2023.
Second is the falling trendline along the peaks of April and May. The earth-moving stock has spent a lot of time since June pushing through that line. Is intermediate-term resistance finally giving way?
Third, prices have held the rising 200-day simple moving average (SMA). That may reflect a bullish longer-term trend.
Turning to the shorter-term, our 2 MA Ratio custom script shows how the 8-day exponential moving average (EMA) has crossed above the 21-day EMA.
Finally, you have the price zone around $363. It was the close on April 24 before CAT gapped lower on earnings and resistance in July. Traders could now potentially view it as the trigger for a breakout.
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The first pattern on today’s chart is the low in June, the lower low in August and this month’s higher low. That’s a potential high basing pattern that may suggest new support has been established after a period of consolidation. It’s also noteworthy to see that occur above the previous highs from 2023.
Second is the falling trendline along the peaks of April and May. The earth-moving stock has spent a lot of time since June pushing through that line. Is intermediate-term resistance finally giving way?
Third, prices have held the rising 200-day simple moving average (SMA). That may reflect a bullish longer-term trend.
Turning to the shorter-term, our 2 MA Ratio custom script shows how the 8-day exponential moving average (EMA) has crossed above the 21-day EMA.
Finally, you have the price zone around $363. It was the close on April 24 before CAT gapped lower on earnings and resistance in July. Traders could now potentially view it as the trigger for a breakout.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options and futures. See our Overview for more.
Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options or futures); therefore, you should not invest or risk money that you cannot afford to lose. Online trading is not suitable for all investors. View the document titled Characteristics and Risks of Standardized Options at https://www.TradeStation.com/DisclosureOptions. Before trading any asset class, customers must read the relevant risk disclosure statements on https://www.TradeStation.com/Important-Information/. System access and trade placement and execution may be delayed or fail due to market volatility and volume, quote delays, system and software errors, Internet traffic, outages and other factors.
Securities and futures trading is offered to self-directed customers by TradeStation Securities, Inc., a broker-dealer registered with the Securities and Exchange Commission and a futures commission merchant licensed with the Commodity Futures Trading Commission). TradeStation Securities is a member of the Financial Industry Regulatory Authority, the National Futures Association, and a number of exchanges.
TradeStation Securities, Inc. and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., both operating, and providing products and services, under the TradeStation brand and trademark. When applying for, or purchasing, accounts, subscriptions, products and services, it is important that you know which company you will be dealing with. Visit https://www.TradeStation.com/DisclosureTSCompanies for further important information explaining what this means.
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