Caterpillar Is Near Resistance

Published on Friday, 03 August 2012 08:52 Written by TradersHuddle Wire

New York, August 3rd (TradersHuddle.com) - Shares of Caterpillar, Inc. (NYSE:CAT) are trading very close to calculated resistance at $86.97. The stock ended the trading session at just $83.12, which is near levels that make it difficult to buy or start a position.

Caterpillar Inc. (NYSE:CAT) designs, manufactures, and markets construction, mining, agricultural, and forestry equipment. The Company also manufactures engines and other related parts for its equipment, and offers financing and insurance. Caterpillar, the largest earth moving equipment maker in the world, distributes its products through a worldwide organization of dealers. The maker of bulldozers and excavators was founded in 1925 and headquartered in Peoria, IL.

Caterpillar's stock range is defined by its calculated support defined at $78.79 and by the resistance level at $86.97; the stock is clearly over-extended from support, making it harder for participants to establish fresh longs.

Traders don't have a clear entry point for Caterpillar. However, as the stock pulls back towards $78.79 it will definitely provide a reference point to establish a trade. On the other hand, if the stock breaks above its resistance level at $86.97 then traders will get an opportunity to enter the stock as it moves to a higher range.