$SPHS man $CAT and $IBB ripped it up today. Good thing i work at Cat business picking up again finally
Yea - I noticed that heavy construction equipment and industrial metals got a big lift from the Trump win - these sectors may go on a major tear - only time will tell, I am long on every possible pull back. These were the top sectors out of 165.
We are shorting CAT at this levels. P/E is over 90. It is up on hype and false dream of Trump construction projects. If you find out the budget to do those projects let me know too. HYUNDAI construction equipment are big competitor to CAT. Price war.
CAT should retreat sharply below $90 this week ( even maybe on Monday) considering the fact that the recent breakout was an emotional one and was not based on the substantial news and new contracts. No budget for any construction projects at least now and also P/E of CAT is ridiculously high.
Treat CAT as a trade. Yes, the momo may carry it a bit, but there is plenty of equipment capacity out there already in the US. A lot of firms just rent what they need rather than buy.
I am careful. Even when I am 100% sure about a trade, I am careful and enter the trade in steps and get out quickly when it pulls back so that I can enter again.
The only reason I say this is because CAT just hit a 52 week high, but the DOW is at an all time high. I think CAT, right or wrong, can still run. Overvalued? Probably. But its a multi-nat and many many factors come into play that are still as yet unknown. CAT was at $110 in July of '14. Trump loves CAT. Shorting a stock that is making a 52 week high, in my experience, is not the best of moves. We shall see. As a rule of thumb though, its best not to swim with sharks in especially shark infested waters. CAT would be one of those. Major DOW component. It goes up or down depending on where they want the DOW, not what the company is worth.