Caterpillar Inc. (CAT) — This manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines fell from more than $70 in early September to under $30 in mid-October.

Caterpillar is considered by many analysts to be the blue-chip stock of its industry and the first to attract attention when it’s time to dress up a portfolio.

At around $35, the stock is at a support zone that goes back to late 2003. But for this purchase to work, CAT will have to hold above yesterday’s low of $34.73 or it will violate our recent Collins-Bollinger Reversal (CBR) buy signal.

CAT’s target for a near-term trade is $47.

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Sam Collins is a registered, fee-based portfolio manager who may be contacted samailc@cox.net. You can also check out an archive of some of his most recent market outlooks by clicking here.