2016-07-28 15:21:39

Caterpillar Inc., #CAT [NYSE]
Industrial goods, Agricultural and Construction machinery, USA

Financial performance of the company:
Index – DJIA, S&P 500;
Beta – 1.57;
Capitalization – 34.86 В;
Return on asset – 3.60%;
Income – 2.95 В;
Average volume – 6.37 М;
P/E – 12.42;
ATR – 2.06.

Analytical review:

  • The company ranks the tenth on capitalization in the sector of “Industrial goods” among the issuers traded in the American stock market;
  • Publication of the Caterpillar’s report for Q2 of the fiscal year 2016 this week and positive dynamics of the American stock market caused the rise in company’s stocks by 5.5%. At the moment ETF for the index &P 500 (#SPY) is traded at the historic highs;
  • According to press-release, company’s revenue fell by 16%, to 10.34 billion USD against the forecast of 9.99 billion USD. EPS (earnings per share) was at the level of 1.09 USD, which was above the forecast of 0.96 USD;
  • At the press-conference company’s management said that company's results exceeded market expectations due to introduction of the costs reduction program. Currently, the company is also implementing business restructuring program. The company has increased investments to this program from 500 million USD up to 700 million USD during the current financial year;
  • It is expected that the company’s net profit this year will be $3.55 per share and the revenue will reach the level of 40-40.5 billion USD.

Summary:

  • Investors were pleased with the Caterpillar’s report for Q2 of the fiscal year 2016. Successful implementation of the restructuring program will improve company’s results in the near future;
  • It is advisable to enter the market from the key support and resistance levels.

Trading tips for CFD of Caterpillar Inc.

Key levels:
Support levels: 80.85 USD and 78.20 USD.
Resistance levels: 85.80 USD.

Medium-term trading, Н4
Currently the issuer has broken down and consolidated above resistance level of 80.85 USD. If the price maintains the mirrored support level of 80.85 USD and in case of the respective confirmation (such as pattern Price Action), we recommend to open long positions. Risk per trade is not more than 2% of the capital. Stop order can be placed slightly below the signal line. Take profit can be placed in parts at the levels of 85.75 USD, 87.50 USD and 90.00 USD with the use of trailing stop.

Medium-term trading, Н4
Medium-term trading, Н4


Short-term trading М15
At the moment the issuer is traded between the local support and resistance levels of 82.95/84.25 USD. It is advisable to enter the market after breaking out and testing of these levels. Positions can be opened towards the signal line and the nearest support/resistance levels. Risk per trade is not more than 3% of the capital. Stop order can be placed slightly above/below the signal line. Take profit can be placed in parts of 50%, 30% and 20% with the use of trailing stop.

Short-term trading М15
Short-term trading М15