Caterpillar a Decent Bottom Fishing Stock

During a press conference held Thursday in Beijing, the location was very telling, Caterpillar Inc. (CAT) CEO James Owens gave an update on guidance by saying that the company expects total sales and revenue for 2008 to exceed $50 billion. Reuters had a good highlight of some noteworthy comments made; prolonged economic weakness into 2009 for western countries, U.S. housing won’t pick up until 2010 but the underlying and overriding story was the emerging country growth that would offset weakness- for instance, the fact that China revenue is expected to double to $4 billion by 2010. Recently basing, trading at $70.60, and at a forward PE that would dip into the single digits on another decline (probably unlikely given that value managers would be all over this before it happened), Caterpillar seems to be a decent bottom fishing stock in this market. There is a lot of overhead– 50-day ma at $70.85, a $72 technical stranglehold and the 200 day ma at $73.22, but if the Dow can catch a bid following the Labor Day weekend, then Caterpillar should too and could clear most, if not all of those near term resistance levels.