Caterpillar shares gain for a second straight session on Thursday, company upgraded by BofA/Merrill Lynch on strong sales, earnings expectations

On May 11th Bank of America Merrill Lynch upgraded Caterpillar from ”Neutral” to ”Buy”, citing continuing acceleration in monthly retail sales, stronger earnings expectations as well as an increase in dividend this year.

Caterpillar shares closed higher for a second consecutive trading session on Thursday. The stock went up 0.63% ($0.63) to $100.99, after touching an intraday high at $101.92, or a price level not seen since May 3rd ($102.17). In the week ended on May 7th the shares of the heavy machinery manufacturer lost 2.56% of their market value compared to a week ago, which marked the first drop in the past three weeks and also the worst performance since the week ended on May 12th. However, the stock has pared its loss to 1.24% so far during the current month, following a 10.24% surge in April. The latter has been the largest monthly increase since November 2016. For the entire past year, Caterpillar shares gained 36.46%.

According to BofA/Merrill Lynch, another “big beat and raise” may occur in July, while an increase in dividend may be observed during the summer.

Additionally, the bank upgraded its price target on Caterpillar’s stock from $105 to $120.

At the same time, the firm outlined good prospects for Caterpillar’s mining business. Analysts noted that the heavy machinery maker itself has suggested its clients will have to replace 700 vehicles.

According to CNN Money, the 20 analysts, offering 12-month forecasts regarding Caterpillar’s stock price, have a median target of $110.00, with a high estimate of $128.00 and a low estimate of $78.00. The median estimate is an 8.92% surge compared to the closing price of $100.99 on May 11th.

The same media also reported that 14 out of 25 surveyed investment analysts had rated Caterpillar’s stock as “Hold”, while 8 – as “Buy”. On the other hand, 1 analyst had recommended selling the stock.

Daily and Weekly Pivot Levels

With the help of the Camarilla calculation method, today’s levels of importance for the Caterpillar stock are presented as follows:

R1 – $101.15
R2 – $101.31
R3 (Range Resistance – Sell) – $101.48
R4 (Long Breakout) – $101.96
R5 (Breakout Target 1) – $102.53
R6 (Breakout Target 2) – $102.77

S1 – $100.83
S2 – $100.67
S3 (Range Support – Buy) – $100.50
S4 (Short Breakout) – $100.02
S5 (Breakout Target 1) – $99.45
S6 (Breakout Target 2) – $99.21

By using the traditional method of calculation, the weekly levels of importance for Caterpillar Inc (CAT) are presented as follows:

Central Pivot Point – $100.42
R1 – $102.21
R2 – $104.77
R3 – $106.56
R4 – $108.34

S1 – $97.86
S2 – $96.07
S3 – $93.51
S4 – $90.94