How to Protect Against Falling Caterpillar

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Unlike other stocks falling since the beginning of the year, Caterpillar (CAT) kept its growing trend line until June 2008. As a company that gets 60% of its revenue from outside of North America, its stocks had been profiting from the declining U.S. dollar. But the currency turnover and worries about the global economies sent Caterpillar shares down by 50% in just two months.

The picture above shows the monthly price chart. There are three peaks where the new high is higher than previous. At the same time, RSI [Relative Strength Index] already signals a declining trend. This bearish divergence provides two selling opportunities.

Comments

[jnamador:]

In what way does this article answer the title?

2008 Nov 11 09:01 AM

[joekoz:]

Cat makes more profit rebuilding older machines than by selling new machines. Where is that figured in your analysis?

2008 Nov 11 09:12 AM

[Diegojames:]

Is CAT or Komatsu in a position to profit from increased Chinese economic growth? Bloomberg says Komatsu. So China is not mad at Japan?
This article does not answer anything...Except give a title to an interesting blank >>>>>&g...
Diegojames
(long CAT- because we will need industrial equipment to clear all the BS out of Congress, Wall STreet and all the Mega Media Business programs...

2008 Nov 11 08:34 PM