Stock of the day: Caterpillar

You can sense a bit of uncertainty on the stock market right now. Inflation, policy tightening, it all has a big impact on the way how traders perceive stocks right now. Definitely we still can find some great buying opportunities but in the same time, many stocks present very typical bearish patterns. We try to cover both sides of the market. Today, I present you Caterpillar, where we can see a positive sentiment on the chart.

Caterpillar was in the bearish correction since June 2021. ‘Was’ as we currently see the end of this correction and a comeback to the bullish trend. What is worth noticing, is how technical this correction was. The price created a beautiful inverse head and shoulders pattern (orange), which retraced precisely 38,2% of the whole rise. You know that we love this level as it works very often with a stunning accuracy.

At the beginning of the year, the price broke the neckline (blue), which technically gave us a long-term buy signal. Demand fully controls the situation, showing determination, giving bigger probability for the further upswing. As we know that training is the game of probabilities, not possibilities then our current sentiment on CAT is positive.