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Serge: Digging for profits from Caterpillar

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Returns are limited in the manufacturing industry forcing investors to search for an opportunity to generate profits. But the bullish results from Caterpillar Inc.’s third-quarter earnings report last week have proved to investors that this company is able to deliver solid returns. Serge Berger, better known as The Steady Trader, is leveraging the relative weakness in the industrial manufacturing sector. He is now looking to short Caterpillar’s stock.

Shares of Caterpillar appear to some to be overbought at the moment, trading slightly above USD 100. This has created an opportunity for short-sellers to enter the market from a technical perspective, according to trader, Serge Berger. The company’s stock rose 5% after reporting strong Q3 results, with sales of USD 13.54 billion last week. Growing demand from the United States compensated for flat sales in China, Europe, Africa and the Middle East. Cost cutting measures, including layoffs also helped the company generate USD 1.1 billion in revenue.
Falling commodity prices have caused demand for construction machinery in the mining industry to waver. Using the industry’s relative weakness, Serge is looking to short Caterpillar’s stock on a break below USD 99. He is targeting a move towards USD 94.50. A stop can be placed at USD 102.
 
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