Shares of Caterpillar Inc (CAT) hit a high of $170.51 today. The March 2020 low was $87.50. This whopping move signals an overbought situation. In addition, there is a Caterpillar stock chart double top in play. The price point for this is $173.50. What is unique about the double top price point is that it’s a nearly perfect 100% move up on the stock off the March 2020 lows. This forms a symmetry that gets technical traders smiling.
For those curious about the RSI, it stands at 76, above the extreme overbought level. As a technical trader, I am eyeing a classic short at the Caterpillar stock chart double top. This setup is higher reward, with little risk. Demand for Caterpillar equipment is getting pulled forward on expectations of a robust recovery. So even if that happens, it is likely the stock is already factoring it in. Look for a pullback from a double top of $173.50 to $150.00 in a matter of a month or two.
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