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Today, we’re opening a new bullish trade on Caterpillar Inc. (NYSE:CAT). CAT has been pulling back a bit following the stock’s huge gap higher in the aftermath of the company’s most recent earnings announcement on Oct. 24, but the stock appears to be establishing strong support at around $135. We anticipate that this level is going to hold and send the stock back up to its recent highs near $140.
CAT stands to benefit not only from the strong economic environment we are experiencing here in the United States (with 3% GDP growth in the third quarter) but also from the strong economic environment we are seeing abroad, especially in China.
CAT’s CFO called out growth in China specifically on the company’s earnings call as a “bright spot,” and we expect this trend to continue.
‘Buy to open’ the CAT December 140 Calls (CAT171215C00140000) for a maximum price of $2.05.
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