This may take some time (say a week or two) to develop but essentially there are three levels that I think are key in determining whether CAT stays strong or breaks down. Those are 170, or the highest the stock has ever been and were it recently sold off. 155.40, Consistently served as past resistance until CAT broke through to reach its all time highs. Whenever CAT breaks through this level it really runs up. Lastly, 150.60 which served as a past resistance but most recently served as a support.
So all in all, CAT blasted to 170 and sold off fairly quickly but now consolidating a bit as the 157 price. Im interested to see how it holds at this price. If it does, so be it, it has strength, but if it breaks down and down trends to the 155.40 level I will be looking to get short. And if it approaches the 150.60 level I will be extremely interested in getting short.
Personally, I will be watching to see CATs price action this week. If CAT rebounds and take note if the rebounds form a lower high and are approaching the levels listed above. If the trend keeps going up and shows strength I will keep an eye at 170 (Maybe it breaks through and rallies or it sells off). If CAT continues down, I will be watching 155.40 to get short.
Note: I put some anchored VWAP in there to see, but I dont think they add much value to the overall analysis (for the time being).
So all in all, CAT blasted to 170 and sold off fairly quickly but now consolidating a bit as the 157 price. Im interested to see how it holds at this price. If it does, so be it, it has strength, but if it breaks down and down trends to the 155.40 level I will be looking to get short. And if it approaches the 150.60 level I will be extremely interested in getting short.
Personally, I will be watching to see CATs price action this week. If CAT rebounds and take note if the rebounds form a lower high and are approaching the levels listed above. If the trend keeps going up and shows strength I will keep an eye at 170 (Maybe it breaks through and rallies or it sells off). If CAT continues down, I will be watching 155.40 to get short.
Note: I put some anchored VWAP in there to see, but I dont think they add much value to the overall analysis (for the time being).
So the short idea didnt work out but thats because CAT broke through the resistence at 155.40. Note that 170 is still a resistance. I will be watching further to see how CAT responds to the increase in price.