Current trend

Shares of Caterpillar Inc., a manufacturer of construction and mining equipment, have been correcting for the second week within a long-term upward trend. At the beginning of the month, the price reached the upper limit of the main Murrey trading range of 375.00 (Murrey level [0/8]) but could not consolidate above it and dropped to 359.38 (Murrey level [7/8]). To change the current trend, the quotes need to consolidate below 343.75 (Murrey level [6/8]), after which downward dynamics are expected to develop to the area of 312.50 (Murrey level [4/8]) and 281.25 (Murrey level [2/8]). An upward breakout of the key “bullish” level of 375.00 (Murrey level [8/8]) will allow the asset to grow in the reversal zone to 406.25 (Murrey level [ 2/8]).

Technical indicators confirm the continuation of the upward trend: Bollinger bands are growing, and Stochastic reverses upwards from the oversold zone. The MACD histogram is decreasing in the positive zone, which does not exclude a decline.

Support and resistance

Resistance levels: 375.00, 406.25.

Support levels: 343.75, 312.50, 281.25.

Trading tips

Long positions may be opened above 375.00, with the target at 406.25 and stop loss 355.00. Implementation time: 5–7 days.

Short positions may be opened below 343.75, with the targets at 312.50, 281.25, and stop loss 362.00.