August 8, 2023, 11:31 am EDT
2023 Actual Trade: CAT +25% Profits
Timing is everything. It applies to the stock market participants whose holding times are in days, weeks, or months. If you are a long-term investor that could hold a position for years, then the entry point is relatively less important than the fundamental data or outlook of the company.
Technical analysis or chart analysis to find the ideal entry and exit points is critical to determine the success or failure of a trade.
In this example, we made +25% profits through Caterpillar Inc (CAT) in about a two-month timeframe. CAT is among one of the thirty components in the Dow Jones Industrial Average or Dow Jones index. Although heavy equipment is a traditional industrial stock, not a SmartPhone maker or any AI-related company, it can still be a powerful money maker when getting at the right time. So, it is important not to underestimate a stock in DJIA because of its industry or size.
As we mentioned in the article, 06/06 Heavy Equipment Maker – Caterpillar Inc (CAT), where we can see CAT made an 8% gap-up on June 2 after completing its falling wedge pattern. This three-month base serves as a foundation for the stock to rally. Combined with a gap-up and solid fundamental analysis, there are three days to get in the CAT (06/02, 06/05, 06/06) before it began its 45-degree uptrend rally in the next two months.
Getting in at the right time enables you to have a good time for the rest. The 08/23 earnings report injected another +9% for the day which reminded us to get ready for a profitable trade.