CAT is another on the list

As I've been watching performance of industry groups, the Farm and Construction Machinery has been a group I've been interested in, thus the reason CAT and DE have been on my short candidate list.

 The weekly hart is certainly interesting to me. Even at the Q1 2010 top, which until recently saw the most draw down, RSI didn't' go negative. This time RSI did go negative as CAT made higher highs.

 On the daily chart, yesterday CAT put in a candle that looks very much like a shooting star reversal candle. Japanese rice traders who first used candlestick charting would refer to the shooting star as there being "trouble overhead". The fact that thus far CAT's highs today have stayed below yesterday's lows is also attractive.

Here you can see the cycle of accumulation starting the trend up, previously there was a negative divergence and if you look carefully, that uptrend ended not only on a negative divergence, but  false breakout as well. The divergence today is in a leading position. As usual, I'd like to short in to strength, but even at these levels with a stop above yesterday's highs, CAT still makes for an interesting short candidate.

As with any short, always be aware that if you are short when t goes ex-dividend, you are responsible for paying the dividend.