Caterpillar CAT Stock Downtrend Channel Breakout, Dark Pool Buying

  • Post category:Dark Pool Stocks
  • Reading time:3 mins read
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Caterpillar CAT stock formed a downtrend channel breakout chart pattern on July 14, 2023.

finviz dynamic chart for  cat

Dark pool trading occurred in CAT stock over the last 30 days of trading. We think the dark pool trades were mostly buy orders because CAT stock trades higher than when the dark pool prints hit the tape.

CAT stock chart on July 16 2023 with dark pool trades shown with orange bars
CAT stock chart on July 16, 2023, with dark pool trades shown with orange bars

Make sure to review this lesson on dark pool trading so that you understand the chart above.

The dark pool buying makes sense considering the sector rotation we are beginning to see into the Industrial sector.

Caterpillar Inc. is an American corporation that primarily manufactures construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives. They sell their products worldwide and also provide related services such as financing, leasing, and maintenance of their equipment. Caterpillar is known for its wide range of heavy machinery and equipment, including excavators, bulldozers, wheel loaders, backhoe loaders, and motor graders. They also produce engines for various industries, including power generation, marine, and industrial applications.

Baird supplier contact raising questions on Caterpillar’s Q4 production rates

According to Baird analyst Mircea Dobre, orders from Caterpillar are beginning to decline after he had a conversation with a supplier of undercarriage parts for the company. The lack of clarity regarding Q4 production that the company’s supplier contact is observing is a sign that Caterpillar needs to reevaluate production and deliveries, which the company interprets as a result of dealer inventory builds and Caterpillar’s efforts to adjust production and avoid significant channel overstocking. Baird believes Caterpillar may not achieve the required dealer destock, which would be detrimental to the stock given the supplier datapoint casting doubt on Q4 production rates. The stock of Caterpillar is rated as Underperform by Baird.

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