• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • TheStreet Smarts
  1. Home
  2. / Investing
  3. / Stocks

Can Caterpillar's Candles Keep Climbing?

Here's what CAT's charts are telling us.
By BRUCE KAMICH
Apr 09, 2021 | 10:43 AM EDT
Stocks quotes in this article: ROKU, CAT

In a Real Money column Thursday, Jim Cramer told readers that if you want to take the temperature of the market, look no further than Roku (ROKU)   and Caterpillar (CAT) .

These two stocks represent the battle between secular growth stocks that do well no matter what the economy, and cyclical stocks, which only rally when the economy is doing well. Roku was booming during the pandemic and it will do well post pandemic as well. Caterpillar has the edge right now, however, as investors are chasing those lucrative upside surprises as the economy expands. 

Let's check out the charts of CAT. 

In the daily bar chart of CAT, below, we can see a strong uptrend the past 12 months but the indicators are showing some subtle changes more recently. The shares are in an uptrend above the rising 50-day moving average line and above the rising 200-day moving average line. CAT is trading about $60 above the 200-day moving average line. This is not twice the level of the 200-day average but visually extended in my opinion and the widest since August.

The On-Balance-Volume (OBV) line shows a steady rise the past year but levels off the past five weeks. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been weakening the past five weeks. 

 

In this weekly Japanese candlestick chart of CAT, below, we can see that prices have doubled from their base in the $120 area in 2018 and 2019. For an industrial company like CAT this is a logical place to anticipate some profit-taking.

The weekly OBV line is bullish and so is the MACD oscillator.  

In the monthly Japanese candlestick chart of CAT, below, we get a different perspective than the weekly chart. Starting from June of 2020 we can see 10 record highs of the 8-10 record high pattern. This month of April the chart shows a doji so far and could continue to be a top reversal pattern. It's early but it bears watching. 

 

Bottom-line strategy: Longs should consider raising stop protection to $212.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Employees of TheStreet are prohibited from trading individual securities.

TAGS: Investing | Stocks | Technical Analysis | Construction & Engineering | Industrials | Mad Money

More from Stocks

It's Far Too Early for a Victory Lap in the Race Against Inflation

Bret Jensen
Aug 12, 2022 10:45 AM EDT

Prices are continuing to rise, particularly for labor and rent, and that could put a drag on profits and consumer spending.

Fossil Group Sounds the Alarm While NL Industries Rewards Its Shareholders

Jonathan Heller
Aug 12, 2022 10:30 AM EDT

The former signaled lower revenues for the year while the latter declared a healthy special dividend.

The TJX Companies Reports Next Week, But There's a Trade Here

Stephen Guilfoyle
Aug 12, 2022 10:15 AM EDT

Many large chain retailers report during the week to round out earnings season, along with the July Retail Sales.

Major Indexes Keep Uptrends Intact After Mixed Thursday

Guy Ortmann
Aug 12, 2022 10:00 AM EDT

However, we are becoming more reticent about chasing price at current levels given some of the data and valuation issues.

Could China Be Our Next Move?

Bruce Kamich
Aug 12, 2022 9:00 AM EDT

Here's what I see with the iShares China Large-Cap ETF.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 08:44 AM EDT PETER TCHIR

    CPI Beats Expectations, But Maybe Not the 'Whisper'?

    Slightly better-than-expected inflation across the...
  • 01:44 PM EDT STEPHEN GUILFOYLE

    This Holding Lights Up With Strong Earnings

    Check out the latest from TheStreet's Stocks Under...
  • 09:24 AM EDT PETER TCHIR

    Jobs Report Reaction: Incredibly Strong, But Questions to Ask

    An incredibly strong July jobs report. Not only d...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login