CAT breaks below Thursday's low
Caterpillar Inc. (CAT) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, CAT ended the week 4.22% higher at 112.47 after losing $1.59 (-1.39%) today on low volume, strongly underperforming the Dow Indu. (-0.04%) ahead of tomorrow's Memorial Day market holiday. Closing below Thursday's low at 113.82, Caterpillar confirmed its breakout through the prior session low after trading up to $2.35 below it intraday.
Daily Candlestick Chart (CAT as at May 22, 2020):
Friday's trading range has been $2.69 (2.36%), that's below the last trading month's daily average range of $3.73. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for CAT.
Three candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and two bearish patterns, the Bearish Short Candle and the Black Candle. The last time a Bearish Short Candle showed up on May 11th, CAT lost -3.32% on the following trading day.
Prices are trading close to the key technical support level at 109.73 (S1).
While still in a long-term downtrend, the short and medium-term trends both turned bullish already.
Among the five market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Bullish Hikkake Pattern" stand out. Its common bullish interpretation has been confirmed for Caterpillar. Out of 100 times, CAT closed higher 62.00% 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 10 trading days, showing a win rate of 57.00% with an average market move of 0.79%.