In today’s blog, we will have a look at the latest price action of Caterpillar
The company released first quarter earnings last week. Revenue came in at $13.47 billion, which was higher than expectations of $13.27 billion, and adjusted earnings per share of $2.94 beat expectations of $2.83. The stock dipped on Wednesday despite the strength in these numbers, as the company warned that it may lose market share in China amid competitive pricing pressure. Below you can see the daily chart of Caterpillar before the opening on Wednesday, when the technical picture was pointing at a dip before any upside would be seen.
The stock ended the cycle from the 1/25/18 peak at the 10/25/18 low. Above from there, it managed to break above the 12/03/18 peak making an incomplete sequence from that low, indicating more upside into the equal legs (blue box) toward the 146.48 level, where a bigger reaction lower should be seen. (Swing counts do not reflect Elliott Wave counts!)
Caterpillar 04.24.2019 Daily Sequence Analysis
In the second chart below you can see the price action in Caterpillar after its earnings release. As expected it pulled back, but as long as it manages to stay above the $129.24 low, it is still capable of trading higher into the equal legs extreme area (blue box) before a bigger reaction to the upside should take place. For now, any pullback against the $129.24 low should find buyers again in the sequences of 3-7 or 11 swings, targeting the equal legs area ($146.48-165.22).
Caterpillar 04.24.2019 after the earnings release
In the latest update below from Friday, you can see that Caterpillar has been holding the trendline as expected. Ideally, it will now continue higher into the blue box area where a reaction lower should take place.