Caterpillar Inc., #CAT [NYSE]
Industrial goods, Agriculture and Construction equipment, 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:

  • Over the last 6 months the price of the company has dropped by more than 20%. It is expected that company’s quotes will continue to decline.
  • The main business of the company is production of the construction and mining equipment. Mining industry goes through the confidence crises.
  • Further decline in the company’s quotes is caused by the fall of commodity prices in the past year.
  • Important strategic partner of the company is China. This year China will continue the policy of quantitative easing of the national currency. Strengthening in the USD will trigger the decline in company’s revenue.
  • The main region with the high volume of sales for the company is the North of America. This region demonstrated the lowest decline in sales and production.
  • Interest rate in the USA remains low. Mortgage rates are also maintained at the low levels. It can be assumed that recovery of the housing market will take place soon.

Summary:

  • It is not expected that mining and energy sectors will recover in the near future. Housing market remains the only sector, where the company can operate effectively and earn high profit. Nevertheless, the company is unlikely to increase sales in the housing sector to such a high level that it will cover losses in the other sectors.
  • It is likely that in the near future company’s quotes will go down.

Trading tips for CFD of Caterpillar Inc.

Long-term trading:
at the moment the issuer is traded between 72.75-75.85 USD. If the price maintains this level and case of the respective confirmation (such as pattern Price Action), we recommend to open short positions. Risk per trade is not more than 2% of the capital. Stop order can be placed slightly above the signal line. Take profit can be placed in parts at the levels of 65.00 USD, 58.50 USD and 54.00 USD with the use of trailing stop.


Analytical review of the stocks of Caterpillar Inc.

Short-term trading: on the chart with the timeframe 15M the issuer is traded between the local support and resistance levels of 70.75 - 72.50 USD. We recommend to enter the market after breaking out and testing of these levels. Positions can be opened near 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 below the signal line. Take profit can be placed in parts of 50%, 30% and 20% with the use of trailing stop.


Analytical review of the stocks of Caterpillar Inc.




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