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by Andrew Hetherington
For the past five years Caterpillar (CAT) has not been known as a market mover. It has bounced anywhere from $30.00 - $65.00 throughout this period. It is now time for a move upwards.
Position: N/A
Andrew Hetherington
Classic Dow Theorist who trades as a pure technician, using pattern recognition.
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SYMMETRICAL TRIANGLE
Caterpillar Inching Forward
03/05/02 07:51:23 AMby Andrew Hetherington
For the past five years Caterpillar (CAT) has not been known as a market mover. It has bounced anywhere from $30.00 - $65.00 throughout this period. It is now time for a move upwards.
Position: N/A
| Figure 1 shows a weekly chart of Caterpillar Inc. A large 9-month symmetrical triangle formed in 2001 on very good diminishing volume and a strong breakout occured last week on almost 16 million shares. In addition to this promising development, CAT has dividend and equity growth from this point forward and makes a very attractive medium to long-term hold, particularly for those on fixed incomes. |
| My expectations are for a rise upwards to the all-time high of $66.44 that occurred in May of 1999, and to eventually surpass this resistance area. Keep in mind that Caterpillar is not a fast mover, but you should catch it at the right time if you purchase a long position in the low to mid $50.00 area. |
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| Figure 1: Weekly chart for CAT. |
| Graphic provided by: SuperCharts. |
| |
| On the smaller picture, shown in Figure 2, a strong breakout with 5.2 million shares occured last Monday, February 25, 2002. CAT then formed a flag for a very brief throwback and resumed the uptrend on Friday with a one-day reversal. Although the volume was not huge for this reversal, it was still significant. The volume picked up after moving away from this consolidation area, illustrating underlying strength. |
 Figure 2: Daily chart for CAT. Naturally, short-term speculators might not think this style of play is for them, but when the pickings become slim it is food for thought. |
Classic Dow Theorist who trades as a pure technician, using pattern recognition.
| Toronto, Canada |
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