Caterpillar (CAT) Offering Possible 44.93% Return Over the Next 24 Calendar Days

Caterpillar's most recent trend suggests a bullish bias. One trading opportunity on Caterpillar is a Bull Put Spread using a strike $136.00 short put and a strike $131.00 long put offers a potential 44.93% return on risk over the next 24 calendar days. Maximum profit would be generated if the Bull Put Spread were to expire worthless, which would occur if the stock were above $136.00 by expiration. The full premium credit of $1.55 would be kept by the premium seller. The risk of $3.45 would be incurred if the stock dropped below the $131.00 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 65.66 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


LATEST NEWS for Caterpillar

Earnings Preview: Caterpillar (CAT) Q2 Earnings Expected to Decline
Fri, 24 Jul 2020 16:30:04 +0000
Caterpillar (CAT) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Here Are 2 Top Ways to Play Caterpillar Stock
Fri, 24 Jul 2020 13:07:16 +0000
Caterpillar (NYSE:CAT) is a great American company, but the current economic conditions do not favor its prosperity. CAT stock depends on global growth. Currently, countries are struggling to stay afloat. The worldwide quarantine in March halted all business at the drop of a hat, so all expansion plans died almost overnight. The problem is that restarting growth is going to be a long slog.Source: aapsky / Shutterstock.com The order to reopen businesses is easy, but what won't be easy is recapturing the growth momentum that was in motion before the crisis. Moreover, there will be restrictions going forward as panic has set in and threatens the way we did business before the novel coronavirus.With all this uncertainty in mind, infrastructure stocks will struggle until after the November election.InvestorPlace – Stock Market News, Stock Advice & Trading Tips CAT Stock Is in Good HandsThe Caterpillar team has extensive crisis management experience. But this global quarantine was unique — and almost all stocks crashed. From the January high to the March low, CAT stock lost more than 40% of its value. The bulls recovered most of it, but the easy work is done.This sounds bearish, but there is light at the end of the tunnel. There are technical opportunities looming just above and below current levels.CAT stock has been setting higher lows and hitting a roof near $141 since the March bottom. This makes for a great standoff, and so far, the bears have won battles at that line. The onus is on the bulls to take it out so they can trigger a spike. The reward for them if they do that is a $20 to $40 overshoot from there. It won't be easy and there is a lot of resistance in the way of that outcome. * 10 Cybersecurity Stocks We Need Now More Than Ever Fundamentally, the setting is not ideal for Caterpillar's business. The macroeconomic conditions are in shambles and hundreds of millions of people are out of work worldwide, so the demand for equipment is definitely depressed. Governments are in the process of reopening their countries but there have been hiccups, especially in the United States. The recovery ramp is not going to be steep. Investors must be humble with their upside enthusiasm.Luckily, CAT stock is not expensive with a 14 times price-earnings ratio. Moreover, there is very little froth in the stock price relative to its full-year sales. This means it doesn't have a lot of fat to shed like say Zoom Video Communications (NASDAQ:ZM) for example. The Stuck-in-the-Muck Trade OpportunitiesSource: Charts by TradingView I last wrote about CAT stock almost two years ago, and at the time, it was trading at similar levels. This is emblematic of how limited its upside potential is. Since it is not overvalued I would be more enticed to sell risk against support then chase potential rallies.Nevertheless, there are two opportunities from here. The first is to buy the stock on the breakout above $141 per share. This would be a momentum trade with a clear upside target. Or the second — and my favorite — is to sell premium against what others fear. I find it best to sell puts to generate income out of thin air against proven support zones.Using the options, I can sell the October $110 put and collect almost $2 for it. I don't even need a rally to win. In fact, CAT stock can fall almost 20% and this trade will still deliver its maximum gains. But if it falls below my put then I have to own the shares at $110 with a break-even level of $108. Without a new shoe to drop, owning Caterpillar at that price is not likely to be a mistake in the long run.At $108 per share it would have closed all the chart gaps this year and would be close enough to the Covid-19 low for support.The basic idea of today's setup is to trade Caterpillar stock by either chasing the momentum above $141 per share, or betting on the downside support from the quarantine. Otherwise, investors would be relying on a lot of "hopium" in order to profit.Nicolas Chahine is the managing director of SellSpreads.com. As of this writing, he did not hold a position in any of the aforementioned securities. More From InvestorPlace * Why Everyone Is Investing in 5G All WRONG * America's 1 Stock Picker Reveals His Next 1,000% Winner * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * Radical New Battery Could Dismantle Oil Markets The post Here Are 2 Top Ways to Play Caterpillar Stock appeared first on InvestorPlace.

U.S. business borrowing for equipment falls 10% in June- ELFA
Thu, 23 Jul 2020 19:00:01 +0000
U.S. companies' borrowings for capital investments fell about 10% in June from a year earlier, the Equipment Leasing and Finance Association (ELFA) said on Thursday. Despite the sequential rise in volumes, it remains to be seen whether this trend will continue as the summer progresses, ELFA Chief Executive Officer Ralph Petta said. Washington-based ELFA, which reports economic activity for the nearly $1-trillion equipment finance sector, said credit approvals totaled 71.5% in June, up from 71.0% in May.

Cross-Sector: Market Data Highlights
Thu, 23 Jul 2020 15:39:09 +0000

Caterpillar CFO to Participate at Jefferies Industrial Conference 2020 on August 6; Webcast Available
Thu, 23 Jul 2020 13:00:00 +0000
Caterpillar Inc. (NYSE: CAT) Chief Financial Officer Andrew Bonfield is expected to participate in a fireside chat and Q&A; session with institutional investors at the Jefferies Industrial Conference 2020 on Thursday, August 6, 2020. Mr. Bonfield is scheduled to speak for 30 minutes, beginning at approximately 11:30 a.m. ET. There are no presentation materials for this event.

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