Caterpillar Crawls Out Of A Trench (CAT)

Caterpillar moved above the 200 day moving average this week to get out of the trench it was building.

This trench has been a gentle correction from a massive uptrend in 2017. The SCTR is returning to 75 which is a great signal of strength. Notice the SCTR behavior in 2017. The shaded area chart shows the $SPX relative strength moving to new 3-month highs. 

Price is breaking above the channel with big volume. Lastly the momentum shown on the MACD has moved above zero. Looking left, that is a big change.

As long as it holds the 200 day moving average, this looks like a good place to find an entry. A move below the 200 would be a good place to have a stop execute.

Good trading,
Greg Schnell, CMT, MFTA