Why Options Bulls Should Target Caterpillar Stock

CAT recently brushed off a bear note from Citigroup

Aug 11, 2021 at 12:02 PM
facebook X logo linkedin


Blue-chip bellwether Caterpillar Inc. (NYSE:CAT) is pulling back to its 200-day moving average, which has acted as support for the equity in the past. Plus, the stock boasts a 55% year-over-year lead, and is up 14% in 2021, making now the perfect time to buy calls.
 
There’s plenty of room for upgrades, too. Of the 15 in coverage, only five call CAT a "strong buy," while nine say "hold" and one says "sell."
 
The stock also overcame a substantial rise in short interest, which tacked on 38% in the past six months, while CAT added 8%, a sign of underlying strength in the equity. What’s more, the security managed to quickly brush off a downgrade from Citigroup to "neutral" from "buy" earlier in the year.
 
Caterpillar calls can be had for a relative bargain right now. This is per the security’s Schaeffer’s Volatility Index (SVI) of 24%, which stands higher than just 13% of readings from the past year, suggesting options traders are pricing in low volatility expectations at the moment. Even better, the stock’s Schaeffer’s Volatility Scorecard (SVS) ranks at 70 out of a possible 100. This implies CAT has exceeded these volatility expectations – a boon for buyers.
 
Subscribers to Schaeffer's Weekend Trader options recommendation service received this CAT commentary on Sunday night, along with a detailed options trade recommendation -- including complete entry and exit parameters. Learn more about why Weekend Trader is one of our most popular options trading services.
 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI