Caterpillar (CAT) Offering Possible 69.49% Return Over the Next 8 Calendar Days

Caterpillar's most recent trend suggests a bearish bias. One trading opportunity on Caterpillar is a Bear Call Spread using a strike $220.00 short call and a strike $225.00 long call offers a potential 69.49% return on risk over the next 8 calendar days. Maximum profit would be generated if the Bear Call Spread were to expire worthless, which would occur if the stock were below $220.00 by expiration. The full premium credit of $2.05 would be kept by the premium seller. The risk of $2.95 would be incurred if the stock rose above the $225.00 long call strike price.

The 5-day moving average is moving up which suggests that the short-term momentum for Caterpillar is bullish and the probability of a rise in share price is higher if the stock starts trending.

The 20-day moving average is moving up which suggests that the medium-term momentum for Caterpillar is bullish.

The RSI indicator is at 62.95 level which suggests that the stock is neither overbought nor oversold at this time.

To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here

LATEST NEWS for Caterpillar

Has Caterpillar (CAT) Outpaced Other Industrial Products Stocks This Year?
Tue, 09 Mar 2021 16:30:04 +0000
Is (CAT) Outperforming Other Industrial Products Stocks This Year?

4 Reasons Caterpillar Stock Shot Up 18.1% to an All-Time High in February
Mon, 08 Mar 2021 16:15:00 +0000
Shares of Caterpillar (NYSE: CAT) soared 18.1% in the month of February, according to data provided by S&P Global Market Intelligence. If January offered investors a glimpse of what's happening within the company, February was all about positive macro developments that set the blue chip stock on fire. Caterpillar bulls got their first kickoff on Jan. 29 when the company topped estimates on its fourth-quarter revenue and earnings, and management sounded optimistic about 2021 given a better-than-expected recovery in most end markets, particularly construction.

2 Stocks Dividend Investors Will Love
Sat, 06 Mar 2021 13:41:00 +0000
Dividends provide a level of calm and consistency for investors worried about the next market crash. Cleaning conglomerate Clorox (NYSE: CLX) and international construction and energy leader Caterpillar (NYSE: CAT) are two dividend stocks that investors are sure to love. After a record fiscal year 2020 (FY20), Clorox began FY21 with a strong start.

CAT Stock Shows There's More To Consider Than Just Growth Stocks
Fri, 05 Mar 2021 21:20:28 +0000
With our usual focus on growth, it might be odd to think of an old Dow Jones industrials stock for swing trading.

3 Industrial Stocks That Are Ignoring the Sell-Off
Fri, 05 Mar 2021 16:50:37 +0000
Panic was in the air this week. The interest-rate hobgoblins came out of the closet to haunt investors everywhere. Well, not everywhere. Oil stocks cared not a whit for the drama. Nor did industrial stocks. In fact, both of these sectors were where traders went to hide. I’m intrigued by the buoyancy from the industrial sector and will shine a spotlight on three strong stocks to buy. Equities flexing their muscles during times of turmoil are easy to see. Just sort your watchlist by percentage change. They’re the few darlings sitting in the green when everything else is red. From a charting perspective, outperformance appears when prices remain above support and key moving averages while everything else melts down. 9 Cheap Stocks That Look Like a Bargain Industrials score high marks on both fronts. The sector has stood tall this week, allowing its chart to stay above the rising 20-day moving average. Here are my three favorite setups in the space:InvestorPlace – Stock Market News, Stock Advice & Trading Tips Caterpillar (NYSE:CAT) Deere (NYSE:DE) Emerson (NYSE:EMR) After a closer inspection of each chart, I’ll reveal an options trade you can use to bank profits. Industrial Stocks: Caterpillar (CAT) Source: The thinkorswim® platform from TD Ameritrade Let’s start with a logic chain. The underpinning of surging interest rates is inflation. Inflation pressures are rising because commodity prices are climbing. Commodity prices are climbing because global growth expectations are lifting. And do you know who thrives on global growth? Cyclical stocks like Caterpillar. The past week of selling appears nothing more than a garden variety pullback for CAT stock. What’s more, the prior advance saw a sharp uptick in momentum and a quartet of accumulation days. With institutions heavily favoring the feline, the wind is at the back of buyers, and higher prices are more likely than lower ones. The Trade: Buy the May $220/$230 bull call spread for $3.80. You’re risking $3.80 to capture $6.20 potentially. Deere (DE) Source: The thinkorswim® platform from TD Ameritrade Deere is following in Caterpillar’s footsteps. Indeed, their price charts boast many similarities. DE stock’s last upswing had some serious firepower behind it, thanks to an impressive earnings report. Its top and bottom-line growth had buyers eagerly snatching up shares, and I can’t see them completely abandoning shares in light of a little interest rate scare. Plus, for all its fury, the past week of selling delivered a textbook three candle retracement. The profit-taking was mild compared to the previous ascent. DE was up seven days in a row preceding the drop, so it arguably needed to cool. 9 Cheap Stocks That Look Like a Bargain Thursday saw a test of the rising 20-day moving average the ultimately succeeded. Buyers swooped in to maintain the integrity of the short-term trend. If you’re looking for dips to shop, this one belongs at the top of your list. The Trade: Buy the June $340/$360 bull call for $8.50. You’re risking $8.50 to capture $11.50 potentially. Emerson (EMR) Source: The thinkorswim® platform from TD Ameritrade Emerson Electric rounds out our trio of industrial stocks to buy. The market’s temper tantrum hasn’t affected the EMR chart one bit. In fact, while the S&P 500 was getting torched on Thursday, EMR was tagging a record high. The outperformance is again on full display this morning. While the broad market is sinking, EMR is up 1%. Whatever is spooking stocks at large is having zero impact on investor appetite for Emerson. And that’s a fact that demands attention for strength seekers. The typical volatility or past behavior of EMR’s price trend seems to lend itself to position trading over swing trading. The uptrend has been slow and steady. I like buying more time with a call spread to give the stock plenty of runway to continue ascending. The Trade: Buy the June $90/$95 bull call for $2. You’re risking $2 to capture $3 potentially. On the date of publication, Tyler Craig did not have (either directly or indirectly) any positions in the securities mentioned in this article. For a free trial to the best trading community on the planet and Tyler’s current home, click here! More From InvestorPlace Why Everyone Is Investing in 5G All WRONG It doesn’t matter if you have $500 in savings or $5 million. Do this now. Top Stock Picker Reveals His Next Potential 500% Winner Stock Prodigy Who Found NIO at $2… Says Buy THIS Now The post 3 Industrial Stocks That Are Ignoring the Sell-Off appeared first on InvestorPlace.

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