During Monday night's Mad Money program, Jim Cramer pointed out that two oil giants would be reporting earnings on Friday -- Exxon Mobil (XOM) and Chevron (CVX) . Cramer said he's still betting on Chevron. He was also bullish on Caterpillar Inc. (CAT) given that both oil and China appear to have bottomed.
We looked at CAT on July 15, writing that, "CAT is breaking out on the upside and its new-found strength could invigorate the Dow Industrials. Traders could go long CAT at current levels risking a close below $130. The $170 area is our first upside price target."
Let's check the charts again ahead of earnings on Friday.
In the updated daily bar chart of CAT, below, we used just six months of price activity to drill down closer to the price action. Prices are pointed up and teasing the $140 area which they did in June and again recently. The moving averages have positive slopes and the 50-day moving average line is close to crossing the slower-to-react 200-day moving average line for a bullish golden cross.
The On-Balance-Volume (OBV) line has been strong since late March and tells us that buyers have been more aggressive the past four months. The Moving Average Convergence Divergence (MACD) oscillator could easily cross to a fresh buy signal.