Caterpillar (CAT): Journey to New Heights

Caterpillar (CAT): CAT

For Caterpillar, we are currently dealing with Wave (3), which is soon approaching its maximum at the 461.8% level of $385. Following this, we expect to see Wave (4) and then Wave (5), marking the end of our largest cycle, which concludes in Wave I. This sets the stage for building larger positions over the long term, although this will take considerable time, so our focus remains on the nearer term for now.
On the 2-day chart, it's apparent that we are approaching a significant resistance. The 461.8% level at $385 coincides with the 100% extensions for the maximum of a potential Wave 5 at 100%. Therefore, we anticipate encountering substantial selling pressure on Caterpillar, where we intend to find our entries for Wave (4). This process will take time, as there is still some room to move upwards, and we won't place aggressive entries just yet. We might turn before reaching this exact level, as it's not always necessary to hit these levels precisely.

Comment:

Since our last analysis, Caterpillar has seen a significant rise, now approaching our maximum level assumed for the overarching Wave (3) and Wave 5, at $385.15, which represents both the peak for Wave 5 and for Wave (3). Therefore, we anticipate encountering considerable selling pressure at this level. However, we will not place a short position here; instead, we'll await new long entry opportunities, as shorting at this peak would be too risky. We will simply observe how the situation unfolds and possibly place an entry for Wave (4) to capture the final push towards Wave (5). We will place this limit order once we have more information and can see a potential downtrend or reversal, which could occur in the coming days or weeks, making Caterpillar more intriguing than some might expect.