Caterpillar delivered a strong session, and the chart confirms that the move was technically meaningful. What stands out is a bullish breakout from a flag pattern marked in green. This is a classic continuation formation, typically appearing after a strong impulse higher, followed by a brief consolidation.
The breakout above the upper boundary of the flag activates the pattern and signals continuation of the prior uptrend. Importantly, this is not the first time Caterpillar has respected this structure. In the second half of January, we saw a very similar setup: a flag formation followed by a clean upside breakout. That signal led to an almost 20% rally, confirming that this stock reacts well to technical continuation patterns.
The current setup follows the same logic. As long as price remains above the upper boundary of the broken flag, sentiment stays positive. The breakout level now acts as support, and holding above it reinforces the bullish structure.
From a technical perspective, the bias is clearly to the upside. If momentum continues and the breakout holds, Caterpillar appears positioned for another leg higher, consistent with the behavior seen earlier this year.