Technical Pulse: Caterpillar INC. Final bull before a grand slam down. May 15, 2019

Current Sentiment: Long term Bearish

Support 1: 124.00                  Resistance 1: 141.35

Support 2: 116.16                   Resistance 2: 154.00

Support 3: 112.31                   Resistance 3: 159.37

Caterpillar’s price movement has entered into a bearish 5 wave triangle but the technical factors indicates that there is a potential to enter long once price closes above 130.00 .

  • Price has a strong start to the upside by closing above the previous day’s bearish candle close. The only worry and downside is that prices did not manage to close above the previous candle close.  
  • Previous candle closes and have a slight rejection on the ascending triangle bottom leg, effectively forming a ((d)) leg wave of the triangle.
  • Base on the momentum shown, the stochastic K and D line are already cross and it means that the bull might resumes its move.
  • Elliott Wave count in the triangle suggest that the ((e)) leg is not completed and with the strong confluence of 61.8% of the Fibonacci and supply zone, the upcoming ((e)) leg is a strong attraction to rally towards the supply zone.

*This bullish trade is a risky trade as it is trading against the dominant trend which is bearish. Should the price break the ((d)) leg wave, the whole triangle wave count will be invalidated. 


Red line = 200 period moving average, Blue line = 50 period moving average, Green line  = 22 period moving average

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About the author

Profile photo of Chua Wei Ren

Chua Wei Ren
Technical Analyst
Phillip Securities Research Pte Ltd

Wei Ren specialises in Technical Analysis and has 9 years of experience in studying classic technical price action. He also study and research extensively on Elliott wave theory, Dow Theory and Supply & Demand strategies as he believes that history plays an important role in how the market is reflected in the future.

He graduated with a Bachelor of Economics and Finance from University of Murdoch.

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