On CNBC's "Options Action," Tony Zhang said that Caterpillar Inc’s CAT stock has been “largely rangebound” between $190 and $230. “A couple of days ago, we bounded off of the $230 upper band and I think that we’re headed back towards the lower band,” he added.
Check out other stocks making big moves in the premarket.
Looking at Caterpillar’s chart relative to its industrials sector, it is “currently forming this double top, after what has been a very strong relative performance since the November low,” Zhang mentioned. He added that this was a “good time to bet on what could be some underperformance.”
Caterpillar is trading at 17 times its next year’s earning, which is a “pretty rich premium to its relative history,” Zhang further stated.
CAT Price Action: Shares of Caterpillar lost 3.80% to settle at $215.18 on Friday.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Ad Disclosure: The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guaranty the accuracy or availability of any rates shown above. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.
All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own Web site where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.
Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers' terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.
Rate collection and criteria: Click here for more information on rate collection and criteria.