Caterpillar (CAT) Offering Possible 21.07% Return Over the Next 10 Calendar Days

Caterpillar's most recent trend suggests a bullish bias. One trading opportunity on Caterpillar is a Bull Put Spread using a strike $157.50 short put and a strike $152.50 long put offers a potential 21.07% return on risk over the next 10 calendar days. Maximum profit would be generated if the Bull Put Spread were to expire worthless, which would occur if the stock were above $157.50 by expiration. The full premium credit of $0.87 would be kept by the premium seller. The risk of $4.13 would be incurred if the stock dropped below the $152.50 long put 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 45 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

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Dow Jones Surges 750 Points After Election; UnitedHealth and Tech Giants Rally; Caterpillar Stock Sinks
Wed, 04 Nov 2020 19:03:00 +0000
The Dow Jones Industrial Average (DJINDICES: ^DJI) was up about 2.5% at 1:25 p.m. EST. Shares of UnitedHealth (NYSE: UNH) and tech giants Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and (NYSE: CRM) were big gainers. Meanwhile, Caterpillar (NYSE: CAT) was the Dow's biggest loser as the potential for a major infrastructure bill faded.

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