Investors are watching a correction in Caterpillar Inc (CAT) stock over the last week. Caterpillar went from $87.50 to a recent all-time high near $247.00 on the hopes of continued Federal stimulus as well as a massive infrastructure bill. With stimulus likely over and the infrastructure bill in doubt, Caterpillar is seeing a large correction. Investors and swing traders are wondering where the buy level will be? The answer can be found in the stock charts. As a pro trader, I look for multi-factor levels. In other words, a price point where I have 2-3 technical points converging. In the case of Caterpillar, the level is $199.00.
This coincides with a technical pivot point from the high in January 2021 as well as the rising 200 moving average on the daily chart. This gives investors and swing traders major support to buy on Caterpillar. Look for a snap-back bounce should the stock hit that technical point in the coming week or two.
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