August 2 Chart of the Day - Caterpillar
On Tuesday, industrial equipment manufacturer Caterpillar’s (CAT) stock rose more than 8% after the company’s management said it expects 2023 results "will now be even better than we described during our last earnings call."
This catapulted price into unchartered territory making new all time highs. From a price action technical analysis perspective this can prove to be challenging when charting because there is no historical price structure at these levels.
Challenging, but not impossible.
Two of the five price action tools we teach (support/resistance and supply zones) can't be used when a chart is trading at new all time high levels.
However, using Fibonacci and trend we can determine statistically valid price targets as seen on the monthly chart. Does this mean that price will absolutely hold at these levels? No, because nothing is guaranteed or certain in the markets.
Additionally, using Advance Fibonacci techniques we can identify potential pull back long levels / zone of interest as seen in the weekly chart.
So what's next?
Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.
- Support/Resistance
- Trend
- Fibonacci
- Supply/Demand Zones,
- Change Control Zones
Take a look at the charts and let us know what you think.
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