The beloved stock on the NYSE CAT is getting pummeled today.
And if you have been watching the financial news or following me on Twitter, you’ll know that they are getting investigated today by practically every agency in the Federal Government at their corporate offices. This isn’t new for Caterpillar (NYSE: CAT) as it has had its run-ins with the law in the past. But this was a stock that was setting up beautifully for a breakout over $100, and instead it has dropped 4.7% to where it is sitting at a key support level now. But if this doesn’t hold, and you’re not one to use stop-losses (which you should be using), then there are four additional support levels to watch, and I have mapped them out for you below.
Here is the Caterpillar Stock Chart
The first one which is a dotted line that is rising off of the gap up lows from back in November has been successfully tested multiple times and has held each time. Now it is testing that level yet again, and needs to close above it for the bullish thesis of this stock to remain in place.
The best price entry for a trade in CAT is
If that price level breaks, and because it is a trend-line, that support will keep rising higher and higher each day, making it more difficult to sustain, then then there are three more price levels to watch on CAT that will or could act as support. I would consider each of these support levels to be minor ones and not to be trusted to any great extent. Finally, the big one is the rising trend-line off of the June lows that was established back during the Brexit meltdown. Since then, CAT has held very, very strong and would look for this to be the ultimate entry level for the stock if it were to continue to drop. Right now, that entry is hovering around the $90-level.
So keep an eye out for that with the CAT stock price and whether it can ultimately test that level for swing-traders. And most importantly – manage your risk!