Caterpillar Inc (CAT) has been trading in a choppy sideways range since mid-June 2021. The popular construction and mining equipment stock peaked out on June 4th, 2021 at $246.69 a share. Since that pivot top, the shares have dropped and currently trade at $208.10 a share. Traders and investors should note that the stock has declined below its important 50 and 200-day moving averages. This tells me that the stock is in a weak technical position on the daily chart. Ultimately, this is a chart pattern that is vulnerable to further downside in the near term.
The next major support level for Caterpillar Inc (CAT) stock will be around the $185.00 area. This key support area is where the stock was defended in February 2021 before breaking out to new all time highs. This is also a major retrace level on the larger time-frames so it should add strength to the support area when tested. I will be looking for a long-side trade at this important $185.00 level.
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