Current trend

Shares of Caterpillar Inc., a global manufacturer of construction and mining equipment, are trading within a long-term ascending channel: in early November, the price reversed from its lower border and has been growing continuously since then, reaching 296.88 (Murrey level [3/8]).

This week, quotes began to correct downwards amid the disappointment over the publication of the minutes of the last meeting of the US Federal Reserve. Now the price is close to the 281.25 mark (Murrey level [2/8]), supported by the central line of Bollinger Bands; after consolidation below it, the decline can continue to the levels of 265.62 (Murrey level [1/8]) and 250.00 (Murrey level [0/8]). The key for the "bulls" remains the 296.88 mark, the breakdown of which will allow the quotes to resume growth to 312.50 (Murrey level [4/8]) and 328.12 (Murrey level [5/8]).

Technical indicators do not give a clear signal: Bollinger Bands are reversing up, confirming the continuation of the uptrend, while MACD is decreasing in the positive zone, and Stochastic is pointing downwards.

Support and resistance

Resistance levels: 296.88, 312.50, 328.12.

Support levels: 281.25, 265.62, 250.00.

Trading tips

Long positions can be opened above the 296.88 mark with targets at 312.50, 328.12 and stop-loss around 286.00. Implementation period: 5–7 days.

Short positions can be opened below the level of 281.25 with targets at 265.62, 250.00 and stop-loss at 281.90.