Caterpillar Inc. CAT shareholders aren't happy in 2015. The stock is down nearly 10 percent year to date and almost 20 percent over the past 12 months.
In a recent report, JC Parets of Eagle Bay Capital looked into Caterpillar's performance from a technical perspective.
Parets explained that, structurally, Eagle Bay wanted to stay away from Caterpillar “since it broke the uptrend line from late 2013.”
After a severe sell-off, he noted they “wanted to be buying down under 80." The stock currently trades above this area at $82.50.
"This area," Parets added, "has served as support since 2012 and also represents the 38.2% Fibonacci retracement of the 2008-2011 rally.”
Parets noted that momentum coming out of "oversold conditions on this correction would be a positive."
He sees the beginnings of such a move despite poor relative strength.
"This still looks an area we want to be accumulated shares structurally," he concluded.
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