Score 9.9 (out of 10): CATERPILLAR INC could be impacted by macro data and rally +12% over next
6 months

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What’s Going On Here?

Caterpillar Inc. announced second-quarter 2022 numbers which beat Wall Street expectations. Sales and revenues came to $14.2 billion, an 11% increase compared with $12.9 billion in the second quarter of 2021.

Why Now?

CATERPILLAR INC indicates an interesting buy set up for the next 6 months. During the previous 4 instances when the ISM Manufacturing New Orders fell below 50 for the 2nd consecutive month, after being >50 for at least 9 months (as has just happened), CATERPILLAR INC rallied by +12.2% during the following 6 months, with a hit ratio of 100%. This buy signal received a high score of 9.9 (out of 10). This insight was generated with a closing price of 185.69.

What’s This Company About?

CATERPILLAR INC is in the Machinery-Constr&Mining business. Based on the last 2 years’ risk/return profile, this asset is seen as Very Risky. Ticker symbol: CAT US.

What’s My Risk / Reward and Time Horizon?

We found 6 months to be the optimal trade horizon, after testing a number of possible alternatives (accuracy of previous returns). Otherwise consider closing out this trade once the target level of 208.38 (+12.2%) has been reached.

Returns during similar periods:

The chart above shows the previous returns (in %) based on similar setups with the most recent ‘insight’ shown under (1), the second most recent ‘insight’ under (2), etc.

Previous episodes:

10.7% (2019-08-30), 15% (2015-12-31), 13.8% (2012-06-29), 6% (2009-06-30)

Historical Chart:

Summary:

NameCATERPILLAR INC
ViewUp
Star (1 to 10)9.9
Target12%
Time6 months
Hit Rate100%

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