Digging Cat
The beauty of
identifying setups that are based on multiple layers of support or resistance
is that the opportunity can be either in the up or down direction. You don’t
necessarily care. Oh yes…somewhere in the back of your mind you may have a
bias. But you need to suppress it because the market tends to do the opposite
of what you expect.
On the list for
Monday, I’m looking at Caterpillar
(
CAT |
Quote |
Chart |
News |
PowerRating).
Monday, I’m looking at Caterpillar
(
CAT |
Quote |
Chart |
News |
PowerRating).
Friday’s plunge
left it hanging just above potential support at it’s 50% retracement, 200-day
moving average, and the lows of its five-month trading range.
left it hanging just above potential support at it’s 50% retracement, 200-day
moving average, and the lows of its five-month trading range.
Not only that,
when you zoom out to a weekly chart, you find that CAT has a history of
finding support and resistance at its 200-week moving average. We are close to
that level now.
when you zoom out to a weekly chart, you find that CAT has a history of
finding support and resistance at its 200-week moving average. We are close to
that level now.
Consider that CAT
is in an uptrend since October 2000. Consider (although ina very cautious
way) that the market is oversold. What do you get? The potential for something
tradable. Which direction? I’ll be waiting for the market to tell me next
week.
is in an uptrend since October 2000. Consider (although ina very cautious
way) that the market is oversold. What do you get? The potential for something
tradable. Which direction? I’ll be waiting for the market to tell me next
week.
Have a great
weekend,
weekend,
Eddie