Red line -support trend line
Blue line- bearish RSI divergence
CAT stock price is still in a bullish trend making higher highs and higher lows. Price is very close to providing a new higher high above $260.39. However the RSI is providing bearish divergence signals. Bulls should not ignore these signs. Support is found at $247.17. As long as price is above this level, short-term trend remains bullish. A new higher high is very possible but we also expect to see another lower high by the RSI. Although trend remains bullish, bulls need to be cautious and protect their gains. The RSI bearish divergence is a signal of a weakening up trend. It is not a reversal signal, but only a warning.