Caterpillar continues to track higher on the price charts but in May the chart has reached an interesting level.
Caterpillar broke above a 6 year consolidation in late April and has been consolidating since then.
The picture above shows Caterpillar has lots of smaller equipment that is required in and around residential construction. The current breakout in emerging markets showing global growth improving suggesting watching the Caterpillar price action. Another factor is the large mining companies. Below is the chart for Finning which is the largest Caterpillar dealer in the world. Any correlated breakout or breakdown in the two charts would be meaningful information.
Right now both are holding around resistance areas with CAT exceeding the all time highs but not being able to go higher. Keep an eye on both. If they turn up from here, you might want to dig into some.
Greg Schnell, CMT, MFTA.