The market has been able to maintain its low-volatility trend move higher as we get into what are typically the more quiet days of summer trading.
Abbott Laboratories (NYSE:ABT), Boeing Co (NYSE:BA) and Caterpillar Inc. (NYSE:CAT) are three of the large-cap companies on our technical radar screens today as all three companies are part of the market’s melt-up as stocks continue to push to new highs.
Abbott Laboratories (ABT)
Abbott stock surged on Friday with relatively heavy volume, pushing the stock towards a bullish technical trigger. ABT shares were pushed forward on a break above the stock’s 50-day moving average. This initiated a technical buy signal and thus the heavy volume.
The move came close to seeing Abbott shares break above their top Bollinger Band, a move that would have accelerated and extended the rally of this biotech company.
ABT stock will run into a little resistance at $45 from past chart resistance and the fact that the top Bollinger Band still resides at this price.
A move above $45 will give traders a boost of confidence that this market leader is ready to take it to the next level with a price target of $50 from there.
Boeing Co (BA)
The continued political headlines have caused many of the air and defense stocks to start seeing selling as doubt over the Administration’s agenda, including defense spending, grew unsteady. This was the fundamental reason for the weakness in Boeing stock through March and April.
After this consolidation, BA shares are beginning to build momentum again as the stock is headed towards $200 with a head of steam building.
Chart watchers have been eyeing $185 as historical resistance as the stock has been stopped in its ascent at that price a number of times. Now, the break above this price has traders increasing their volume trading on Boeing.
From a short-term perspective, BA shares are likely to become overbought as they approach $200. That will combine with the round-numbered resistance that comes naturally from a price point like $200. Expect to see the stock pause due to these factors. However, Boeing should be able to make a momentum move through this price and continue its leadership role in the market.
Caterpillar Inc. (CAT)
Another group of companies that have been affected by doubt around the Trump administration’s ability to move their agenda forward are the heavy machinery industrial companies.
Caterpillar shares declined more than 10% into a short-term bottom in May, giving investors an opportunity to buy this stock “on sale”. CAT shares have regained their price of $105 and are wrestling with chart resistance in trying to break higher.
Short interest in the latest report showed that the bears have been selling out of their positions, helping to fuel the rally higher. The short interest of 4.0 now indicates that we’ve probably seen the majority of short covering help the stock higher.
Look for a little rest as the stock takes a breather before breaking above $105, but from there, the momentum will move this heavy equipment manufacturer higher towards the $115-mark.
As of this writing, Johnson Research Group did not hold a position in any of the aforementioned securities.
