Stock Analysis on Net

Caterpillar Inc. (NYSE:CAT)

Stock Price Trends


Summary

Key facts

  • The primary trend is increasing.
  • The growth rate of the primary trend is 173.16% per annum.
  • CAT price at the close of May 16, 2024 was $350.72 and was lower than the bottom border of the primary price channel by $34.60 (8.98%). This indicates a possible reversal in the primary trend direction.
  • The secondary trend is decreasing.
  • The decline rate of the secondary trend is 30.77% per annum.
  • CAT price at the close of May 16, 2024 was inside the secondary price channel.
  • The direction of the secondary trend is opposite to the direction of the primary trend. This indicates a possible reversal in the direction of the primary trend.

Linear Regression Model

Model equation:
Yi = α + β × Xi + εi

Top border of price channel:
Exp(Yi) = Exp(a + b × Xi + 2 × s)

Bottom border of price channel:
Exp(Yi) = Exp(a + b × Xi – 2 × s)

where:

i - observation number
Yi - natural logarithm of CAT price
Xi - time index, 1 day interval
σ - standard deviation of εi
a - estimator of α
b - estimator of β
s - estimator of σ
Exp() - calculates the exponent of e


Primary Trend

Start date: October 19, 2023
End date: April 15, 2024

a = 0.9879

b = 0.0028

s = 0.0305

Annual growth rate:

Exp(365 × b) – 1
= Exp(365 × 0.0028) – 1
= 173.16%

Price channel spread:

Exp(4 × s) – 1
= Exp(4 × 0.0305) – 1
= 12.97%

October 19, 2023 calculations

Top border of price channel:

Exp(Y1,114)
= Exp(a + b × X1,114 + 2 × s)
= Exp(a + b × 1,616 + 2 × s)
= Exp(0.9879 + 0.0028 × 1,616 + 2 × 0.0305)
= Exp(5.4978)
= $244.16

Bottom border of price channel:

Exp(Y1,114)
= Exp(a + b × X1,114 – 2 × s)
= Exp(a + b × 1,616 – 2 × s)
= Exp(0.9879 + 0.0028 × 1,616 – 2 × 0.0305)
= Exp(5.3759)
= $216.14

April 15, 2024 calculations

Top border of price channel:

Exp(Y1,235)
= Exp(a + b × X1,235 + 2 × s)
= Exp(a + b × 1,795 + 2 × s)
= Exp(0.9879 + 0.0028 × 1,795 + 2 × 0.0305)
= Exp(5.9906)
= $399.67

Bottom border of price channel:

Exp(Y1,235)
= Exp(a + b × X1,235 – 2 × s)
= Exp(a + b × 1,795 – 2 × s)
= Exp(0.9879 + 0.0028 × 1,795 – 2 × 0.0305)
= Exp(5.8687)
= $353.79

Description

  • The primary trend is increasing.
  • The growth rate of the primary trend is 173.16% per annum.
  • CAT price at the close of May 16, 2024 was $350.72 and was lower than the bottom border of the primary price channel by $34.60 (8.98%). This indicates a possible reversal in the primary trend direction.

Secondary Trend

Start date: March 20, 2024
End date: May 16, 2024

a = 7.6873

b = -0.0010

s = 0.0280

Annual growth rate:

Exp(365 × b) – 1
= Exp(365 × -0.0010) – 1
= -30.77%

Price channel spread:

Exp(4 × s) – 1
= Exp(4 × 0.0280) – 1
= 11.83%

March 20, 2024 calculations

Top border of price channel:

Exp(Y1,218)
= Exp(a + b × X1,218 + 2 × s)
= Exp(a + b × 1,769 + 2 × s)
= Exp(7.6873 + -0.0010 × 1,769 + 2 × 0.0280)
= Exp(5.9610)
= $388.00

Bottom border of price channel:

Exp(Y1,218)
= Exp(a + b × X1,218 – 2 × s)
= Exp(a + b × 1,769 – 2 × s)
= Exp(7.6873 + -0.0010 × 1,769 – 2 × 0.0280)
= Exp(5.8492)
= $346.95

May 16, 2024 calculations

Top border of price channel:

Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(7.6873 + -0.0010 × 1,826 + 2 × 0.0280)
= Exp(5.9036)
= $366.35

Bottom border of price channel:

Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(7.6873 + -0.0010 × 1,826 – 2 × 0.0280)
= Exp(5.7918)
= $327.59

Description

  • The secondary trend is decreasing.
  • The decline rate of the secondary trend is 30.77% per annum.
  • CAT price at the close of May 16, 2024 was inside the secondary price channel.
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