Apr 17, 2012 (SmarTrend(R) Upgrades/Downgrades via COMTEX) --
Caterpillar (NYSE:CAT) was upgraded from Neutral to Buy at Longbow today. The stock closed yesterday at $106.74 on volume of 6.2 million shares, below average daily volume of 6.8 million. Caterpillar Inc. designs, manufactures, and markets construction, mining, agricultural, and forestry machinery. The Company also manufactures engines and other related parts for its equipment, and offers financing and insurance. Caterpillar distributes its products through a worldwide organization of dealers.
Caterpillar has overhead space with shares priced $106.74, or 18.5% below the average consensus analyst price target of $131.00.
If U've been long on CAT lately, you've done very well. Congratulations. To me, this looks like just part of a melt-up on the DOW (30 stocks).
One of the things I look at is the ITM call open-interest vs. puts. For May12, the ATM call open-interest is 3:1 over the puts (strike $105), ITM strike $100 call open-interest vs. put is 2:1. About even at strike $97.50.
Without being a contrarian, this looks bearish for CAT in MAY.
They may have a good ER, but do you really think that the big boys are going to be buying near a top? Don't you think the results are already known by the big players? Is CAT going to charge ahead of the DOW, and rise +25% from here? I don't know, but would not be willing to bet on it.
If I were long, I'd take my gains before the ER. It works both way U know, you're in bull-trap territory now. The shorts have already covered.
Upgrades...rather meaningless, but the news chow-hounds luv'm. Me 2!!!! They usually appear at tops and at bottoms. Gotta justify this melt-up on something. Give me some good old regurgitated, recycled news, and I'm feeling fine.
Upgrades = carrots-on-a-string.
ERs on DOW component stocks are rather non-events. This one's just getting squeezed up to buoy the DOW.
Just another melt-up in progress. But all these "upgrades" are exciting. I'm tweeking!
Most other non-darling stocks are already at support levels, and putting in token dead-cat bounces. If I could find some good 2nd tier shorts, I wouldn't be messing with a DOW component stock, but they are only thing standing, except the likes of bear-trap stocks, as CF, STX, WHR, SHLD, to name a few. The Dogs of the Dow are the last to drop. When there are only 30 of them, it makes for an easy squeeze. Luv dat $Ben.