Caterpillar (CAT) is Having Some Issues
Posted on: Jan 30th, 2009 | By Charles Delvalle | Filed under Chart of the Day
As a little boy, I used to marvel at the bright yellow Caterpillar (NYSE:CAT) trucks in the middle of construction fields and think to myself “that’s freaking awesome!”.
Never once did I even consider that one day I would be writing to you about how Caterpillar shares are ready to plummet. Here, take a look…
If you’ve been following this section every day, than you’ve heard me mention support lines on numerous occasions. A support point is a price (or trend line, or moving average) point that a stock has a hard time going under.
If you notice, CAT formed a support point in October and November. CAT his $32.50 and rallied both times.
But this time the pattern didn’t hold up, which means CATs support line at $32.50 is now a resistance point. Now, CAT should have a hard time rising past $32.50.
If you like the sheer thrill of losing money in the stock market, then you could definitely short CAT right now and probably make a pretty penny.
If you’re a little more conservative, then you’ll wait a few weeks for CAT to rise back up to around $32.50 per share. If CAT fails to break above that price point, then it signals a confirmation of the resistance line… and CAT shares should fall afterwards.
Charles Delvalle is a self-taught market-timing professional and value analyst who's followed and invested in the market for the past ten years. He uses a unique combination of technical and fundamental research to pinpoint rapid profit opportunities with stocks and options.
Charles is also a staunch contrarian and takes pride in finding undervalued sectors and discovering undervalued, cash-rich companies. He frequently mocks government stupidities and points out the "inaccuracies (or lies, take your pick) that government reporting frequently dispels as "truth". 
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it did seem to hold above $30, for a day at least.
Indexes will probably push it lower as they grind it down.