Caterpillar (CAT) Offering Possible 20.48% Return Over the Next 20 Calendar Days

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Caterpillar’s most recent trend suggests a bearish bias. One trading opportunity on Caterpillar is a Bear Call Spread using a strike $200.00 short call and a strike $205.00 long call offers a potential 20.48% return on risk over the next 20 calendar days. Maximum profit would be generated if the Bear Call Spread were to expire worthless, which would occur if the stock were below $200.00 by expiration. The full premium credit of $0.85 would be kept by the premium seller. The risk of $4.15 would be incurred if the stock rose above the $205.00 long call strike price.

The 5-day moving average is moving down which suggests that the short-term momentum for Caterpillar is bearish and the probability of a decline in share price is higher if the stock starts trending.

The 20-day moving average is moving down which suggests that the medium-term momentum for Caterpillar is bearish.

The RSI indicator is at 30 level which suggests that the stock is neither overbought nor oversold at this time.

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Caterpillar (CAT) Dips More Than Broader Markets: What You Should Know
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Tue, 21 Sep 2021 16:47:25 +0000
Stephanie Link, chief investment strategist and portfolio manager at Hightower Advisors, tries to buy low and sell high and Caterpillar Inc (NYSE: CAT) presents an opportunity to buy low, she said Tuesday on CNBC’s “Fast Money Halftime Report.” What To Know: Caterpillar is down more than 25% from its highs and Link thinks “demand is going to be off the charts.” The stock is a restructuring and rising free cash flow story so margins should hold and the company is going to generate free cash flow

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