Caterpillar (CAT) just hit a new recovery high of 60.00 off of its December low at 55.40 and appears poised to continue higher to confront the October-January resistance line at 60.40 next. The resistance line is the next challenge for the bulls as they look to thrust CAT out of a three-month, high-level consolidation period, which projects upside continuation to 64.00-65.00 next. At this juncture, only a decline that breaks and sustains beneath 58.50 will delay the timing of the anticipated upside breakout.

 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.