CAT Rising Wedge & Long Term Channel

CAT has more than doubled since 2016. Price action has taken the stock to its highest levels since 2013 even though revenue has remained relatively flat. Notice the Rising Wedge chart pattern which has reached the top of a Long Term Channel. Volume has been decreasing and other indicators suggest the stock is overbought. FlashPoint Trading is looking for an initial retracement to $110 with the potential for further weakness and price action below $100.

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Comment:

CAT defying gravity with an overthrow above long term channel on average volume. Move is parabolic and may continue to press higher so shorts should buy protection or exit position and wait for better opportunity.