Caterpillar – At an important level of Fibonacci

Caterpillar is trading above its upward trend line on a 4 hour time frame. The stock has retraced to almost the 61.8% level of Fibonacci since it hit its high of 86.85. Generally speaking, if the price bounce back up from the 61.8% retracement level, it represents that the uptrend is strong and it has ability of breaking the previous high. Interestingly enough, the 23.6% retracement level has lined up with a level of support which could be a good opportunity to buy.

However, the RSI is trading in line with the price action which means that the bias could be to the downside.  The overall trend for the stock within this time frame is a side way trend which means unless the price breaks out of this zone, the best opportunity could be buying towards the lower end of this zone and selling towards the higher end. Caterpillar 12-12-2013

Barclays – Downward pressure may still continue

Barclays is trading in a downward channel on a 4 hour time frame. The price is showing more and more weakness as it has failed to touch the upper line of the channel for the past two times which represents weakness for the stock. The RSI is trading near the 30 mark which is considered as an oversold zone however, it has not crossed this zone which is usually a better odd enhancer. The price has pierced the Bollinger band which represents an increase in the volatility and a potential minor mean reversion however, the bias could still be to the downside.