Get to know CAT

By TheWild1 at 24 January, 2008, 8:00 am, Categories : Stock Recommendations

With the strange market that we seem to be locked into, it is a good time to try and find those relatively “cheap” stocks. Stocks that are valued much higher then they currently are. Eventually these stocks will break back out, so why not try and get into them now while they are low. Bring in Caterpillar (CAT).

I personally opened my position on this stock back on Tuesday at 63.99 (stock now sits at 65.08), and it should be up at 80ish.

General Feel

Caterpillar’s principal lines of business include machinery, engines and financial product. One of the downfalls of this stock was that there wasn’t much international exposure; however, that has changed over that last couple of months. They see a lot of business in China and India and erosion from global warming will need machinery. There are tons of different ways to look at this stock, but anyway you play it this is great value play.

Chart Examination

When I look at the chart over a 6 month span I see a falling wedge reversal.

Cat 12308

Final Conclusion

I love this stock right now. I own it myself. Such a strong company that is over 20 points below its 52 week high just seems like a deal too good to pass up. Although this stock can obviously be a little shaky (all stocks are in this market) eventually I see it back up to the mid 70’s at the very least. If the stock drops below my purchasing point (63.99), then I will build my position. Don’t let this be a “what if” situation.