More Downside in Caterpillar?Caterpillar fell sharply last month, and some traders may see further downside risk.
The first pattern on today’s chart is the gap on November 6 after Donald Trump won the U.S. Presidential election. The industrial stock failed to hold that breakout and soon found itself at levels from September. Have buyers disappeared?
Second is the price zone on either side of $360. It’s near last summer’s highs and the 200-day simple moving average. A close under it may signal a breakdown.
Third, the recent series of lower highs may be consistent with bearish continuation.
Next, CAT dropped on October 30 after earnings and revenue missed estimates. That may suggest fundamentals are weakening.
Finally, our 2 MA Ratio custom script in the lower study shows the 8-day exponential moving average (EMA) has been under the 21-day EMA. That could be further evidence of a bearish trend.
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