Caterpillar Inc (NYSE:CAT) has been making waves in the market, and for good reason. The stock was identified by running a ‘High Growth Momentum + Trend Template’ screen, a method that combines two strong frameworks. First, it applies Mark Minervini’s Trend Template, a strict set of technical criteria designed to ensure a stock is in a solid, lasting uptrend. Second, it checks for a High Growth Momentum (HGM) rating of at least 4, which confirms that the company’s core growth metrics are speeding up. This dual approach is built for investors who want to catch stocks that are not only technically strong but also supported by real earnings and revenue momentum. Let’s break down why CAT fits the bill.
Meeting the Minervini Trend Template
The Trend Template is about alignment. It requires moving averages to stack neatly in a bullish pattern and the stock to be near its highs, which signals institutional demand. Here’s how CAT checks every box based on the provided data:
- Price Above Key Moving Averages: The current price of $997.47 is above its 50-day SMA ($895.37), 150-day SMA ($743.06), and 200-day SMA ($685.13). This shows the stock is trending strongly on all timeframes.
- Moving Average Slope: All three SMAs are rising—the 200-day SMA moved from $682.23 to $685.13 recently, and the 50-day is well above both longer-term averages. This confirms ongoing upward momentum.
- 52-Week High/Low Range: The current price is within 6% of its 52-week high of $1,057.07 and is a massive 160% above its 52-week low of $384.25. This meets the criteria of being within 25% of the high and at least 30% above the low—a classic sign of strength.
- Relative Strength: CAT has a ChartMill Relative Strength score of 96.01, meaning it beats 96% of all stocks in the market. This is well above Minervini’s 70-threshold, placing it in elite company.
The importance of these criteria cannot be overstated. Minervini’s method is built on the idea that you want to ride stocks that are already in a Stage 2 uptrend, with tight consolidation patterns and strong relative strength. CAT’s technical profile clearly shows that—it’s a leader, not a follower.
High Growth Momentum in Action
While the Trend Template handles the technical side, the High Growth Momentum rating adds a fundamental layer. It looks for speeding up earnings, sales, and margins. Let’s examine CAT’s numbers:
- Earnings Growth Acceleration: The most recent quarter (EPS Q2Q) shows a 30.35% jump compared to the same quarter last year, a major turnaround from the -4.26% and -21.20% declines seen in prior quarters. This acceleration is a key part of high growth momentum—it suggests the company is turning a corner.
- Sales Growth Acceleration: Revenue growth is also lifting. The latest quarter (Sales Q2Q) grew 22.22% year-over-year, up significantly from 9.51% and -0.72% in the two preceding quarters. This consistent beat on estimates—CAT has beaten revenue estimates 4 out of the last 4 quarters—adds trust.
- Profit Margins: The profit margin in the latest quarter reached 14.64%, improving from 12.55% in the prior quarter and trending higher over the last year. Higher margins often indicate pricing power and operational efficiency, which is a hallmark of growth stocks.
- Estimate Revisions: Analysts are getting more optimistic. The EPS estimate for next year has been revised up by 8.27% in the last three months, and revenue estimates are up 3.85%. This shows the Street is catching on to the positive trend.
The HGM check is critical for growth investors because it filters out stocks that are technically strong but fundamentally fading. CAT’s combination of speeding up earnings and sales, along with improving margins, signals that the company is executing well.
Sector and Market Context
CAT belongs to the Machinery industry, where it beats 95% of its peers, according to the technical data. The overall market environment is mixed—the S&P 500 long-term trend is negative while the short-term trend is positive—but CAT is leading the pack. It’s trading near its 52-week high while the broader index isn’t, a classic characteristic of a market leader in Minervini’s framework.
Technical Assessment Summary
Based on the provided ChartMill technical report, CAT scores a perfect 10 out of 10 in technical rating, but its setup rating is only 3 out of 10. While the stock’s long-term trend is flawless—beating 96% of all stocks, with all moving averages rising—the short-term setup is lacking. The report notes that price movement has been volatile recently (trading in a wide range of $853 to $1,057 over the past month) and it’s currently near the high of that range. This means there isn’t a clear entry or exit point at the moment; the consolidation is not tight enough yet. For a full breakdown, you can view the complete technical analysis here.
Explore More Candidates
The screen that found CAT is just one way to identify high-potential stocks. If you want to see the full list of current candidates that meet the Minervini Trend Template and have strong growth momentum, you can [run the same screen yourself](https://www.chartmill.com/stock/stock-screener?sid=718&f=sm50v_a_sm150v,sm50v_a_sm200v,sl_crs_70_X,sm200v_r,sm150v_a_sm200v,v1_50b100,cu_a_sm50v,cu_a_sm150v,cu_a_sm200v,sl_ratingHgm_6_X,exch_us&v=3&s=ta&sd=DESC&cpl=2&bc=true&nw=1&pam=1&pm=1&set=1&uc=7054723&dc=14111810&o1=3&op1=200,16711680&o2=3&op2=50,255&o3=1&o4=89&op4=40,1,10536676&cf=%28h%3E%3D%28wh520.75%29%29,%28cu%3E%3D%28wl521.3%29%29> and adjust it to your own risk preferences.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Always conduct your own research and consult with a qualified financial professional before making any trading decisions.
Read full article here »
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Caterpillar Inc (NYSE:CAT) Shows Strong High Growth Momentum and Technical Trend Alignment
Caterpillar Inc (NYSE:CAT) has been making waves in the market, and for good reason. The stock was identified by running a ‘High Growth Momentum + Trend Template’ screen, a method that combines two strong frameworks. First, it applies Mark Minervini’s Trend Template, a strict set of technical criteria designed to ensure a stock is in a solid, lasting uptrend. Second, it checks for a High Growth Momentum (HGM) rating of at least 4, which confirms that the company’s core growth metrics are speeding up. This dual approach is built for investors who want to catch stocks that are not only technically strong but also supported by real earnings and revenue momentum. Let’s break down why CAT fits the bill.
Meeting the Minervini Trend Template
The Trend Template is about alignment. It requires moving averages to stack neatly in a bullish pattern and the stock to be near its highs, which signals institutional demand. Here’s how CAT checks every box based on the provided data:
The importance of these criteria cannot be overstated. Minervini’s method is built on the idea that you want to ride stocks that are already in a Stage 2 uptrend, with tight consolidation patterns and strong relative strength. CAT’s technical profile clearly shows that—it’s a leader, not a follower.
High Growth Momentum in Action
While the Trend Template handles the technical side, the High Growth Momentum rating adds a fundamental layer. It looks for speeding up earnings, sales, and margins. Let’s examine CAT’s numbers:
The HGM check is critical for growth investors because it filters out stocks that are technically strong but fundamentally fading. CAT’s combination of speeding up earnings and sales, along with improving margins, signals that the company is executing well.
Sector and Market Context
CAT belongs to the Machinery industry, where it beats 95% of its peers, according to the technical data. The overall market environment is mixed—the S&P 500 long-term trend is negative while the short-term trend is positive—but CAT is leading the pack. It’s trading near its 52-week high while the broader index isn’t, a classic characteristic of a market leader in Minervini’s framework.
Technical Assessment Summary
Based on the provided ChartMill technical report, CAT scores a perfect 10 out of 10 in technical rating, but its setup rating is only 3 out of 10. While the stock’s long-term trend is flawless—beating 96% of all stocks, with all moving averages rising—the short-term setup is lacking. The report notes that price movement has been volatile recently (trading in a wide range of $853 to $1,057 over the past month) and it’s currently near the high of that range. This means there isn’t a clear entry or exit point at the moment; the consolidation is not tight enough yet. For a full breakdown, you can view the complete technical analysis here.
Explore More Candidates
The screen that found CAT is just one way to identify high-potential stocks. If you want to see the full list of current candidates that meet the Minervini Trend Template and have strong growth momentum, you can [run the same screen yourself](https://www.chartmill.com/stock/stock-screener?sid=718&f=sm50v_a_sm150v,sm50v_a_sm200v,sl_crs_70_X,sm200v_r,sm150v_a_sm200v,v1_50b100,cu_a_sm50v,cu_a_sm150v,cu_a_sm200v,sl_ratingHgm_6_X,exch_us&v=3&s=ta&sd=DESC&cpl=2&bc=true&nw=1&pam=1&pm=1&set=1&uc=7054723&dc=14111810&o1=3&op1=200,16711680&o2=3&op2=50,255&o3=1&o4=89&op4=40,1,10536676&cf=%28h%3E%3D%28wh520.75%29%29,%28cu%3E%3D%28wl521.3%29%29> and adjust it to your own risk preferences.
Disclaimer: This article is for informational and educational purposes only and does not constitute investment advice. Always conduct your own research and consult with a qualified financial professional before making any trading decisions.
Read full article here »