Caterpillar Inc. (Friday’s close US$145.53) rallied from US$56.36 in January, 2016, to US$173.24 in January, 2018, (A-B) and then declined below a falling trend-line for the subsequent two years (dotted line). The stock found support at US$113-US$115 during the past year (shaded area). The subsequent rise above ±US$145 signalled the start of a new up-leg (C). The current minor correction toward the 40-week Moving Average (40wMA) provides a good entry level.
Behaviour indicators including the 40wMA and the rising trend-line (solid line) confirm the bullish status. Only a sustained decline below ±US$130 would be negative.
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Point & Figure measurements provide targets of US$160 and US$175. Higher targets are visible.
Monica Rizk is the senior Technical Analyst and Ron Meisels is the president of Phases & Cycles Inc. (www.phases-cycles.com). And he tweets at @Ronsbriefs. They may hold shares in companies profiled.
Chart source: www.decisionplus.com