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♟ Buy CAT Before It Bounces

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CAT Construction Vehicle

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"This might be the best chance you have to get some CAT before it bounces - so you should strongly consider getting positioned now."

Bryan Bottarelli, Head Trade Tactician, Monument Traders Alliance

Bryan Bottarelli

Right now, I believe you have a strong opportunity to buy shares of Caterpillar (CAT) at a very attractive support level.

Here's the setup...

Over the past month, the S&P 500 has gained around 7%. It's had a very strong start to the 2023 investing year.

However...

During that same time frame, shares of CAT have lost 0.4%.

How can you explain this underperformance?

In short, the early theme of 2023 is "risk-on."

In other words, after a dreadful 2022 performance by "risk-on" assets like Tesla and FAANG stocks, investors and traders are now moving back in.

As a result, they're selling safe-haven plays like CAT in order to chase a quick gain in technology.

Is this shortsighted?

I believe so - and that presents you with a nice opportunity today.

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As you can see below, CAT is now starting to bounce off $245, which is the exact spot that it bounced off before reaching $265 in mid-January.

A Nice Opportunity on CAT
 
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YOUR ACTION PLAN

Inside The War Room, I noted last week how much I liked the CAT pullback to the $240-$242 zone. And guess what just happened... Goldman Sachs is now chiming in with a bullish CAT position as well. Goldman just maintained its "Buy" rating, saying it believes CAT is now "positioned to drive mid- to high-single-digit unit profitability growth through the cycle, driven by rising autonomous product features and the value of dealer network uptime amid ongoing construction labor inflation." This might be the best chance you have to get some CAT before it bounces - so you should strongly consider getting positioned now.

In The War Room, we've been riding the latest meme stock short squeeze craze. Last week I took a massive 94% gain on Carvana (CVNA), and right now I've got my eye on several other short squeeze candidates.

Click here to start getting in on the action.

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MONDAY MARKET MINUTE

  • Jobs Are Growing on Trees! After Friday's blowout jobs number, Fed Chair Jerome Powell could find himself in a tricky spot... which is why his speech before the Economic Club of Washington tomorrow could come under heavy scrutiny. That'll be a major talking point over the next couple of days.
  • Is Sherwin-Williams Ready to Pop? The day after the paint company released a disappointing earnings outlook, CEO John Morikis bought $500,000 worth of the company's shares. Maybe he knows something we don't.
  • U.S. Plans 200% Tariff on Russian Aluminum. Bloomberg reports the U.S. will impose the tariff as soon as this week to keep pressure on Moscow as the one-year anniversary of the invasion of Ukraine nears. I'll be keeping an eye on several aluminum companies, including Alcoa and Kaiser Aluminum.

 

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