Caterpillar Inc. (CAT) is expected to report its first-quarter results before the market open on Thursday. Let's check and see if the stock of the construction and mining equipment giant is ready to do any heavy lifting on the charts.
In this daily bar chart of CAT, below, I see that prices have corrected lower from late January. Prices declined to the rising 200-day moving average line, which CAT has been testing since the middle of March. The daily On-Balance-Volume (OBV) line shows a decline from late January, which suggests that traders have been more aggressive sellers than buyers in recent weeks. The trend-following Moving Average Convergence Divergence (MACD) oscillator shows improvement from the middle of March but is still below the zero line and still not in buy territory.
In this weekly Japanese candlestick chart of CAT, below, I see a mixed picture. Prices are holding above the rising 40-week moving average line. The weekly OBV line shows a rise from October to January followed by a decline. The MACD oscillator is above the zero line but poised to narrow. The candles do not show me a clear reversal pattern.
In this daily Point and Figure chart of CAT, below, I can see the software is projecting a possible downside price target in the $186 area. A trade at $226.96 might turn things to the upside.
In this weekly Point and Figure chart of CAT, below, I can see the software is looking at a possible target as low as $168. A trade at $236 may turn this chart to the upside.
Bottom line strategy: In my March 27 review of CAT the charts looked bearish but the follow-through selling has not materialized. I don't know what CAT will tell shareholders on Thursday, but the stock's refusal to break to the downside may be a tell that the next move for CAT could be to the upside. Stay nimble.
