CAT shares show mixed momentum as Stochastic RSI signals oversold conditions: weekly report

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Caterpillar slips 1.51% this week

Highlights

Caterpillar maintains a strong bullish technical structure, trading well above major weekly moving averages and signaling sustained medium- and long-term strength.
Momentum indicators overwhelmingly favor buyers, with four out of four key signals registering Buy or Strong Buy, suggesting a high probability of continued upside.
Expected price range for the next week is $932.20 to $977.90, with consolidation likely unless renewed buying pushes the price above $978.

Acquisitions and dividend hike drive sentiment on mining technology expansion

Caterpillar has completed its acquisition of Skycatch, Inc., adding spatial data capture and AI analytics to its mining technology portfolio. This move follows the completed purchase of RPMGlobal, strengthening its data-driven mining solutions. The company also announced an 8% increase to its quarterly dividend, raising the payout to $1.63 per share payable on August 19, 2024, to shareholders of record at the close of business on July 20.

Bullish momentum persists as buyers dominate despite oscillator divergence

On the weekly chart, momentum remains strong for CAT, with the MACD and ADX clearly indicating continued buyer control above all major weekly moving averages. The RSI and Commodity Channel Index remain in bullish territory, while the Stochastic RSI points to oversold conditions, suggesting some divergence within oscillators. Bull/Bear Power registers a significantly positive value, underlining buyer dominance, and the Awesome Oscillator maintains a neutral reading. The nearest dynamic support stands at the weekly MA-20 ($837.90), with medium-term support further below at $665.59 and major support at $392.37. Weekly volatility remains elevated at 9.82%, with the current price consolidating between support near $837.90 and resistance near $977.90.

Sideways-to-bullish bias dominates as technical signals support new highs

For the next 5 trading days, CAT is expected to remain in a sideways to mildly bullish range, with projected weekly price action between $932.20 and $977.90 based on volatility bands and indicator bias. There is a very high probability (above 80%) of further upside, given that four out of four key weekly indicators are in Buy or Strong Buy territory. The baseline scenario anticipates price stability just below recent highs, while a bullish extension could see a breakout above $978 toward the volatility upper band. A bearish reversal is less likely, but downside moves would initially target dynamic support at the MA-20 ($837.90).

Earlier, analysts noted that Caterpillar’s technical weakness and shifting sentiment posed significant downside risk despite operational strength. However, the current strong momentum across key weekly indicators and consolidation above major supports suggest a prevailing bullish scenario, with potential for an upside breakout if resistance near $978 is cleared in the coming sessions.

Source of Data: CAT Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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