Current trend

Three weeks ago, shares of Caterpillar Inc., a manufacturer of construction and mining equipment, resumed their decline: during this time, the price reached the upper limit of the Murrey trading range in the area of 375.00 (Murrey level [8/8]), which it is actively testing now. Consolidation below it will ensure the strengthening of the downward dynamics towards the targets of 359.38 (Murrey level [7/8]), 343.75 (Murrey level [6/8]) and 328.12 (Murrey level [5/8]). The key for the "bulls" is the level of 390.62 (Murrey level [ 1/8]), supported by the central line of Bollinger Bands, the breakout of which will open up the possibility for the resumption of growth of the trading instrument to 406.25 (Murrey level [ 2/8]) and 421.88 (Murrey level [ 2/8], H4), but such a scenario seems less likely.

Technical indicators confirm the likelihood of further decline: Bollinger Bands and Stochastic are reversing down, MACD is preparing to move into the negative zone and form a sell signal.

Support and resistance

Resistance levels: 390.62, 406.25, 421.88.

Support levels: 375.00, 359.38, 343.75.

Trading tips

Short positions should be opened below the 375.00 mark with targets of 359.38, 343.75 and a stop-loss around 386.00. Implementation period: 5–7 days.

Long positions can be opened above the level of 390.62 with targets of 406.25, 421.88 and a stop-loss around 379.00.