Caterpillar (NYSE:CAT) is looking to break up to continue its bull trend. Ichimoku Cloud analysis indicates the stock could push higher in the coming week.
CAT had a strong vertical move up from June 2020 to June 2021. The price climbed above the Ichimoku Cloud on the weekly chart, and the uptrend pulled the price away from the equilibrium of point of the Ichimoku Cloud.
In June of 2021, the price began a retracement on the weekly chart and formed a horizontal bull flag. The retracement did not pull the price below the Ichimoku Cloud, and CAT maintained its uptrend.
The Ichimoku Cloud noted on the week of Mar. 14 that CAT was preparing for another bull move. CAT has begun working its way upwards towards the purple target zone. Should the price break above the top of Wave 1 on this weekly chart, look for CAT to move to the black line at the beginning of the target zone.
The daily chart shows CAT has moved above the Ichimoku Cloud and formed an uptrend. The Ichimoku Cloud indicates the momentum is up, and the price is looking to climb higher. The daily chart shows a vertical move from Wave 0 to Wave 1, which shifted to a textbook horizontal retracement.
Price on the daily chart popped above the Wave 1 swing high, consolidated, and now has closed above the Wave 1 pivot. If the price moves above the Wave 3 high, it’s more than likely heading up to the daily target zone.
The daily chart offers an early opportunity entry with a relatively small risk for the weekly move.
The hourly chart again shows CAT has moved above the Ichimoku Cloud and formed an uptrend. The price hit the extended targets on the hourly chart and pulled away from the equilibrium point of the Ichimoku Cloud.
CAT has encountered resistance and likely will consolidate, forming a bull flag as it waits for the Ichimoku Cloud to catch up later this week. CAT is set up to take out the Wave 3 high on this 60-minute chart and then move towards the daily targets and possibly continue to the weekly targets.