I’m looking at a trade setup in Caterpillar (CAT, $85.28)
Key price support has been tested and is holding so far at the $83.98 – $85.40 area. This zone includes a .618 retracement a .786 retracement of another swing and a minor 1.618 extension. It is a SAFER bet on the buy side if we can clear the hurdle at $86.50-85 on the daily chart, though your risk on this trade can be defined below the 83.98 area or 81.78 for those who want to be more aggressive.
The potential upside target comes in at 96.98, IF the October 2nd low remains intact. If this same Fibonacci price cluster is violated instead, I will back off the buy side until further notice.