CAT someone was accumulating big time todayMany sweeps firing off on CAT. Should be into trend resistance tomorrow with XLI just now bouncing off trend support. Looking like a good odds trader.
CCCATERPILLAR INC CEDEAR EA 20 REP 1 COM USD1
21,375ARSD
−75−0.35%
At close at Jun 10, 22:10 GMT
ARS
No trades
CAT trade ideas
Post-Earnings FadeCAT jammed higher into earnings. And the results released were pretty darn good. Massive beats. Yet this is one of those times where the pre-earnings run priced in good numbers. Given the rejection after the earnings event, the stock is seeing some pretty good weakness short term. Look for retracements and start selling put spreads into them.
CAT is a little loftyI believe this needs more time to digest the move. AA earnings this week tells us one thing for sure. There is a disconnect from actual demand versus expectations. BA took it on the chin for that reason. Now expectations are huge for CAT. I for one have watched the heavy equipment for sale on craigslist and others. I've never seen so much used equipment for sale. Does that mean everyone is going new? I don't know. RSI is above 80 on this hot stock. I'd be careful to the long side for the near term.
Opening CAT Oct 6 Nov 17 125 Put Calendarwww.tradingview.com
This is what I call a Ecalendar for pre earnings announcemnet calendar spread to take advantage of the volatility expansion that occurs somewhere from 30-45 days before an earnings binary event. CAT is one of many that pops up (the IV) like a gear tooth in a clear pattern; my goal is to place the trade before the pop and profit from the rise in premium.
For the week or three that this should approach target the ideal is no price movement - so I chose category support and resistance but in honesty the price history has little importance to me on this type of trade. The important characteristics I want are high option volume, high open interest and low premium bid/ask spread in those expiries that I may roll through before final exit (in short liquid open contracts).
Trade Price: $3.00 ($300 per contract)
My target profit for this trade: .37 ($37/contract) This is a preset closing order and is reset for that amount after rolling either leg as well.
The trade is defined risk and that is the only loss management involved (no stop loss orders).
Theta 0.62
Delta -4.21
CAT price at open of position: $124.38
CAT Rising Wedge & Long Term ChannelCAT has more than doubled since 2016. Price action has taken the stock to its highest levels since 2013 even though revenue has remained relatively flat. Notice the Rising Wedge chart pattern which has reached the top of a Long Term Channel. Volume has been decreasing and other indicators suggest the stock is overbought. FlashPoint Trading is looking for an initial retracement to $110 with the potential for further weakness and price action below $100.
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