CAT finds support at 20-day moving average
Caterpillar Inc. (CAT) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
CAT ended the week 3.46% higher at 137.99 after losing $1.73 (-1.24%) today, notably underperforming the Dow Indu. (-0.09%) ahead of tomorrow's Presidents' Day market holiday. Closing below Thursday's low at 138.43, the share confirmed its breakout through the previous session low after trading up to $1.54 below it intraday.
Daily Candlestick Chart (CAT as at Feb 14, 2020):
Friday's trading range has been $2.73 (1.96%), that's slightly above the last trading month's daily average range of $2.63. Weekly volatility is also higher, being slightly above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CAT.
Two candlestick patterns are matching today's price action, the Black Candle and the Evening Star which are both known as bearish patterns. The last time a Evening Star showed up on July 11, 2018, CAT actually gained 1.95% on the following trading day.
After trading as low as 136.89 during the day, Caterpillar found support at the 20-day moving average at 137.68. The market closed back below the 100-day moving average at 139.39.
The stock shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Buying might accelerate should prices move above the nearby swing high at 140.50 where further buy stops could get activated.
Among the six market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bullish Bounce off SMA 20" stand out. Its common bullish interpretation has been confirmed for Caterpillar. Out of 56 times, CAT closed higher 58.93% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after nine trading days, showing a win rate of 50.00% with an average market move of -0.02%.