Current trend

Shares of Caterpillar Inc., a manufacturer of construction and mining equipment, have been growing for the second month within the medium-term uptrend: during this time, the price has reversed from the central mark of the Murrey trading range in the area of 312.50 (Murrey level [4/8]), broke through its upper border and is now trading in the upper reversal zone at the mark of 390.62 (Murrey level [ 1/8]), consolidation above which will allow quotes to intensify the upward momentum to the targets of 406.25 (Murrey level [ 2/8]) and 437.50 (Murrey level [ 2/8] for MN). The key for the "bears" is the upper limit of the Murrey trading range at 375.00 (Murrey level [8/8]), a breakdown of which will ensure a decline to the levels of 343.75 (Murrey level [6/8]) and 328.12 (Murrey level [1/8]).

Technical indicators allow the development of a corrective decline: Bollinger Bands are reversing horizontally after growth, Stochastic is reversing down, while MACD is decreasing in the positive zone.

Support and resistance

Resistance levels: 390.62, 406.25, 437.50.

Support levels: 375.00, 343.75, 328.12.

Trading tips

Short positions should be opened below 375.00 with targets at 343.75, 328.12 and a stop-loss at 392.30. Implementation period: 5–7 days.

Long positions can be opened from 406.25 with a target at 437.50 and a stop-loss at 384.80.