Caterpillar Inc. (NYSE: CAT) shares rose in value yesterday on lower trade volume than normal after a number of analysts weighed in on the investing value of the stock with a upgraded rating.
Analysts at Goldman Sachs Group Inc. upgraded shares of Caterpillar Inc. (NYSE: CAT) from Neutral to Buy today. The company currently has a rating of Buy on the stock. The one-year price target of $74.82 is lower than the opening price of $89.10, resulting a number of other analysts to report on the stock recently. Looking back over the last 52 weeks, Caterpillar Inc. stock has a high of $89.87. Typically, after analysts assign an upgrade report on a stock, they will subsequently issue periodic revisions, usually followed by a price target change.
Meanwhile, the Dow Jones Industrial Average DJIA, +0.49% rose 88.55 points, or 0.5% to close at 18,329.04, yesterday.
The S&P 500 index SPX, +0.46% closed up 9.92 points, or 0.5%, at 2,163.66
The Nasdaq Composite Index COMP, +0.69% gained 36.27 points, or 0.7%, to finish at 5,328.67.
In early trading today however, the Dow Jones Industrial Average DJIA, -0.63% dropped 103 points, or 0.6%, to 18,227.
The S&P 500 index SPX, -0.69% fell 12 points, or 0.6%, to 2,150, with all of its main sectors trading lower.
Meanwhile the Nasdaq Composite Index COMP, -0.79% fell 32 points, or 0.6%, to 5,295, dragged down by heavy losses in biotech stocks.
Shares of Caterpillar Inc. (NYSE: CAT) opened at $89.10 yesterday trading between $88.35 and $89.31, and last traded at $88.89, a jump of $0.67 or 0.01 compared to the previous closing price.
Caterpillar Inc. (NYSE: CAT) currently has a market cap of 51.93B.
Caterpillar Inc.Trading Volume
The stock’s average daily volume is 4,329,980 shares out of a total float 583,261,000 and some 1,062,744 shares crossed the trading desk yesterday, lower than normal. Trading volume is likely to increase in the next few days as swing traders often use upticks in trading volume to identify substantial volume growth or dissemination by institutional investors.
However, just a day of significant buy side trading is not enough to determine a trend. As such, market traders will continue to watch for institutional sponsorship as a cue that financial institutions are moving forward.
Institutional sponsorship is defined by ownership of a stock by mutual funds, banks, pension funds and other large institutions.
These professional investors have substantial teams of analysts that investigate thousands of stocks, so it is good confirmation to see them buying a stock you are researching.
Caterpillar Inc. Moving Averages
A moving average can also act as support or resistance. In an uptrend a 50-day, 100-day or 200-day moving average may act as a support level, as shown in the figure below.
This is because the average acts like a floor (support), so the price bounces up off of it.
In a downtrend a moving average may act as resistance; like a ceiling, the price hits it and then starts to drop again.
By identifying trends, moving averages allow traders to make those trends work in their favor and increase the number of successful trades.
Trades for Caterpillar Inc. (NYSE: CAT) have ranged from $56.36 – 89.87, and the stock now has a 50-day MA of $83.90 and 200-day MA of $78.74. Today’s last price is 0.01% lower than the 52 week high of $89.87.
Indeed, earnings growth is among the most important things to look at in regards to stock investing and, accordingly, investors watch for companies that have raised their earnings by at least 25% for the past 3 years.
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