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    Analytical review of the stocks of Caterpillar Inc. of 10.05.2016.

    Caterpillar Inc., #CAT [NYSE]
    Industrial goods, Agricultural and construction machinery, USA

    Financial performance of the company:
    Index – DJIA, S&P 500;
    Beta – 1.57;
    Capitalization – 34.86 В;
    Return on asset – 3.60%;
    Income – 2.95 В;
    Average volume – 6.37 М;
    P/E – 12.42;
    ATR – 2.06.

    Analytical review:

    • The company ranks the tenth on capitalization in the sector of “Industrial goods” among the issuers traded in the American stock market;
    • At the end of April the company issued report for Q1 of the fiscal year 2016, which showed that company’s shares fell by over 10%. It is expected that the decline will continue;
    • According to press-release, Caterpillar’s revenue fell by 26% to 9.46 billion USD against the forecast of 9.50 billion USD. Net profit of the company was at the level of 0.67 USD per share against 2.07 USD per share for the same period a year ago;
    • At the press-conference company’s management stated that poor financial results were caused by the decline in sales of the construction equipment and decrease in activity in the mining industry;
    • The weakest sectors of the company’s business were mechanical and mining equipment. Sales in these sectors fell by 27% and 26% respectively;
    • The company has revised forecast for 2016 fiscal year. It is expected that company’s revenue will fall to 40-42 billion USD against the previous expectations of 40-44 billion USD. According to the new forecast profit per share will fall 3.70 USD against the previously expected profit of 4.00 USD per share.

    Summary:

    • Results demonstrated in the last report will have a negative impact on investors’ confidence to the company. Caterpillar’s revenue and net profit fell in Q1. Revised forecast for the fiscal year 2016 will trigger the decline in price of shares;
    • It is likely that in the near future company’s quotes will go down.

    Trading tips for CFD of Caterpillar Inc.

    Key levels:
    Support levels: 70.15 USD and 65.35 USD.
    Resistance levels: 72.50 USD, 76.55 USD and 80.50 USD.

    Medium-term trading, Н4
    At the moment the issuer is traded in the supply zone of 70.15-72.50 USD. If the price maintains this zone and in case of the respective confirmation (such as pattern Price Action), we recommend to open short positions. Risk per trade is not more than 2% of the capital. Stop order can be placed slightly above the signal line. Take profit can be placed in parts at the levels of 67.50 USD, 65.40 USD and 62.50 USD with the use of trailing stop.

    Analytical review of the stocks of Caterpillar Inc. of 10.05.2016.
    Medium-term trading, Н4

    Short-term trading, М15
    Currently the issuer is traded between the local support and resistance levels of 70.60/72.00 USD. It is advisable to enter the market after breaking out and testing of these levels. Positions can be opened towards the signal line and the nearest support/resistance levels. Risk per trade is not more than 3% of the capital. Stop order can be placed slightly above/below the signal line. Take profit can be placed in parts of 50%, 30% and 20% with the use of trailing stop.


    Short-term trading, М15

     

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