On Wednesday, Caterpillar got a positive adjustment to its Relative Strength (RS) Rating, from 80 to 83.
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IBD's proprietary RS Rating measures technical performance by using a 1 (worst) to 99 (best) score that shows how a stock's price performance over the last 52 weeks matches up against that of all other stocks.
Decades of market research shows that the market's biggest winners tend to have an 80 or better RS Rating as they launch their biggest runs.
Caterpillar broke out earlier, but has fallen back below the prior 418.50 entry from a cup without handle. If a stock you're watching clears a buy point then retreats 7% or more below the original entry price, it's considered a failed base. It's best to wait for the stock to form a new base and breakout. Also understand that the latest consolidation is a later-stage base, which makes it riskier to establish a new position or add shares to an existing one.
Although earnings and sales growth came in at -21% and -1%, respectively, in the latest report, that showed improvement for both earnings-per-share and sales.
Caterpillar holds the No. 2 rank among its peers in the Machinery-Construction/Mining industry group. Astec Industries is the top-ranked stock within the group.
This article was created automatically with Stats Perform's Wordsmith software using data and article templates supplied by Investor's Business Daily. An IBD journalist may have edited the article.
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