Caterpillar, Inc. (NYSE: CAT) and a Historical Pattern for It 

Tom Gentile

Posted in Strategy

By: Tom Gentile on August 5th, 2022 • 2 mins read

When looking at the Money Calendar data one can further filter a stock or ETF to consider by looking in to a sector that is performing well.

Industrials over the past month is one of the better performing sectors. When you look at the Money Calendar list of stocks and ETF’s with patterns that have a start date for today, you will see Caterpillar, Inc. (NYSE: CAT).

They are post earnings, so we don’t have to worry about that event causing any chaos in the management of any option trade.

They are on a bit of a pullback after their earnings were announced, but if you look at their chart you can see it had a nice price run up prior to the release of earnings that it isn’t surprising to see it sell off a bit – one could consider it profit raking if they want.

We will call it opportunity.

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It is a 27-day pattern. It has a 90% accuracy. The avg. profit over this period of days the past 10-years is $4.41 pr 4.41 points.

The price action written about earlier speaks about the run up in to earnings and the pull back since, but the truth of the matter is the catalyst for the trade, whether it be on the stock, or the option is the Money Calendar pattern.

Let’s get to the visuals.

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Option Consideration: Call Debit Spread

The pricing on a Long Call is too pricey so we will highlight just the one option opportunity , which is the Call Debit Spread.

Buy-to-Open an option for CAT and on the same order ticket Sell-to-Open an option for CAT a strike higher than the one bought to open. The goal is to see the stock trade above the price of the sold to open strike for a chance at max profitability.

App: Toms Option Tools

Market Insight articles may show images of lists of stocks meeting a variety of options parameters like Unusual Call and or Put activity or Expensive IV found on my app Toms Option Tools.

Other times I will have other charts may work to amplify my educational points. 

Those options data lists, however, can be found on my app Tom’s Option Tools. Use your device to search up and download this app and get free access to the Morning Reports section of the app.

Other parts of the app are available at a premium subscription rate, but the Morning Reports Lists are yours free.