$CAT Q3 Earnings Cheat Sheet

Event?

CATreportsitsQ3earningstomorrowbeforetheopen?

Theoptionsmarketisimplyingabouta3。

25%onedaymove,whichisabovethe4qtravgofabout2。

25%andthe8qtravgofabout2。

75%。

Sentiment?

WallStreetanalystsarerelativelyneutralonthestock,with14Buys,13Holdsand1Sell,withanaverage12monthpricetargetofaround$92?

CATisoneoftheworstperformingmega-capstocksintheU。

S。

overthelast2years,aperiodinwhichitsessentiallyflat?

ShortInterestis4%offloat。

FundmanagerJimChanoshasstatedthatheisshortCAT。

OptionsOpenInterest?

Openinterestisskewedtoputsbyaratioofabout1。

1to1,thoughrecentactivityhasbeenmuchmoreskewedtocalls,withthe20dayaveragecalltoputratioaround1。

8,andthe10dayaround2。

3?

TheNov90callsandNov85putshavethehighestnear-termopeninterest?

TheJan1480putshavenearly20kofopeninterestaswell。

OnFridaytherewasaninterestingtradewheresomeonebought15koftheDec90callsfor1。

54whenthestockwasaround$87。

50,thistradewasoutrightandbreaksevenonDecexpirationat$91。

55

PriceAction/Technicals?

CAThasbeenarelativeunderperformersince2011,butithascontinuedtoholdtheall-important$80supportleveloverthelast2years:

CATdaily,200daymainblack,CourtesyofBloomberg

Thestockisclimbingaboveits200daymovingaveragethisweek,thefourthtimeinthepast6monthsthatthestockhasmadethatmoveabove,onlytoberejectedeachtime?

Thebroadmarketoptimismhasbuyersmoreoptimisticthatthestockholdsabovethistimearound。

Volatility?

Allthingsconsidered,CATvolisprettylowgoingintotheevent。

NovIVsitsatabout21,upalittlefromrecentlowsinthehighteensbutlowerfromhighsitsseenoverthepastyear。

fromLiveVolPro

NovandDecvolshouldfallintothehighteensfollowingtheevent。

OurView?

CAThasbeenbasinginthelow80sformuchoftheyear,witheverytimeitlookedlikethestockwouldbreakdownatthe82levelseeingaquickbouncebackuptothehigh80s。

Thestocknowsitsatthelevelitshadahardtimebreakingabove。

Ifitistostayrange-boundthestockwouldlikelycomeunderpressurefollowingthereport。