Caterpillar’s High Basing Pattern

dünCaterpillar began the year with a strong rally before entering an extended pause. But now some traders may think the Dow Jones Industrial Average member is ready to start moving again.

The first pattern on today’s chart is the low in June, the lower low in August and this month’s higher low. That’s a potential high basing pattern that may suggest new support has been established after a period of consolidation. It’s also noteworthy to see that occur above the previous highs from 2023.

Second is the falling trendline along the peaks of April and May. The earth-moving stock has spent a lot of time since June pushing through that line. Is intermediate-term resistance finally giving way?

Third, prices have held the rising 200-day simple moving average (SMA). That may reflect a bullish longer-term trend.

Turning to the shorter-term, our 2 MA Ratio custom script shows how the 8-day exponential moving average (EMA) has crossed above the 21-day EMA.

Finally, you have the price zone around $363. It was the close on April 24 before CAT gapped lower on earnings and resistance in July. Traders could now potentially view it as the trigger for a breakout.

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