While the limelight may have been stolen by the soaring AI stocks in recent months, the industrial sector has been quietly surging alongside, and one standout in this resurgence is Caterpillar (CAT). In our Options Trader Pro service, we’ve been consistently capitalizing on CAT since mid-February, executing bullish positions with a remarkable 100% success rate. Across four spread trades, we’ve accumulated $571 (based on trading 1 contract), boasting an average return on capital of 7% within an average timeframe of just 18 calendar days per trade.
What’s propelling this uptrend in industrials, and can the rally be sustained?
Industrial stocks thrive in environments of economic expansion, driven by increased consumer spending, infrastructure projects, and expanding global trade. Currently, as the economic cycle moves into the expansion phase post the 2022 bear market, there’s a palpable surge in demand for goods and services, fueling growth across the industrial sector.
The industrial sector is just shy of hitting a 52-week high, reflecting the sector’s surging momentum.
In dissecting the industry’s performance, I’ve meticulously examined top performers across various time frames, including 1 month, 3 months, and 6 months, while also scrutinizing their historical price movements. Do they exhibit controlled pullbacks, or do they skyrocket abruptly?
The top 10 stocks in the sector using the highest year-to-date percent change are:
Furthermore, delving into options parameters, such as implied volatility, was crucial, considering our focus on option spreads within the Options Trader Pro service. It was imperative to identify stocks offering ample option liquidity and premium for profitable options selling strategies.
Caterpillar emerged as the standout candidate. Our recent closed positions have yielded positive returns, culminating in a successful streak of winners, and our open position currently sits in profitable territory.
With industrial stocks continuing their upward trajectory and broader market sentiments still bullish, I foresee no slowdown in the Industrial sector or for Caterpillar.
