We reviewed the charts of Caterpillar Inc. (CAT) earlier this month, noting that "the charts of CAT look weak and vulnerable to declines. Investors in CAT need to be aware of two key chart points -- the intersection of the 200-day moving average line near $145 and the April-May lows around $138. Closes below these chart points can mean further declines in the weeks ahead."
With CAT trading near $135 today another look at the charts seems in order.
In this daily bar chart of CAT, below, we can see that prices are below the declining 50-day moving average line. They are below the rising 200-day moving average line. They are below the April-May lows.
Anybody who has gone long CAT since November has a loss. This is a weak situation.
The daily On-Balance-Volume (OBV) line is pointed down and the Moving Average Convergence Divergence (MACD) oscillator is in a sell mode below the zero line.
In this weekly bar chart of CAT, below, we can see a bearish alignment of the indicators. Prices are below the 40-week moving average line.
The weekly OBV line is bearish and the MACD oscillator has been in a take profits sell mode since early February.
In this Point and Figure chart of CAT, below, we can see can see the new low for the move down and a possible/potential bearish price target of $111.
Bottom line: The charts and indicators of CAT are pointed down. Traders should be out and investors need to examine their cost basis - this may be a prolonged decline.