What’s Behind This Move In Caterpillar (CAT)

Over the weekend I tweeted about Caterpillar’s momentum just about to take off. This was followed by a 4% jump the next live market day and a new high since the market collapsed 2 years ago..

While this is no surprise to me, as Caterpillar (CAT) is one of my 2010 stock picks, it is good to know why this exact move is happening now.

A huge reason for this push is from momentum traders. Last week the largest earth moving equipment maker in the world finally broke the long-term resistance at $59. Pair this with increase RSI, MACD bouncing higher, and increased volume pattern, this rise was inevitable. See chart below…

While you can see the current move was met with a large volume block, RSI is also nearing 90, which is considered extremely overbought and could lead to a mild pullback in the short-term.

Overall, I still love this stock long-term and love it even more if it stays over $59. As the global economy continues to improve, only expect Caterpillar to go higher from here.

What do you think?