Cummins Possible Buy Signal

Last night on stockspotter I received an exit signal for Cummins (CMI) after the long recommendation had been held for 8 days.  Although the trade did not earn anything I’m glad the stock was brought to my attention.  Coming off my recent analysis of Caterpillar this somewhat comparable company boasts similar records.  Simply put, on a fundamental and technical level I believe there could potentially be an opportunity for an upswing.

Zacks financials recently released a statement that they will be maintaining their Outperform recommendation for CMI.  Their confirmation was possibly concluded based on how the company is set to benefit from fuel economy improvements, new emission standards and increased prices. Cummins results have improved significantly in the most recent quarter, driven by the truck market recovery in North America and continued strength in non-U.S. markets.

Also, I really appreciate the company’s investment in future business.  By diligently reinvesting in research/develop Cummins has been able to implement technology that allows its engines to meet more stringent environmental standards at a lower cost than its competitors, a fact not lost on investors. Today, largely based on the success of its fuel-efficient engines and because it spent on technology when others didn’t, Cummins owns 40 percent of the heavy-duty truck market. Its stock, in turn, is up more than 180 percent — or nearly tripling — over the past two years.

By reading the SwamiChart below one can easily notice the recent blue “valley” indicator by the SwingWaveform indicator on the bottom.  This signal happens to occur during a slight increase in volume as is illustrated by somewhat whiter color emerging from the top Volume indicator.  And although the Predict indicator is in a red “sell” signal, it could be read as a bottom when viewed in combination with the “valley” indicator.

Additional Company Info: Cummins Inc. designs, manufactures, distributes, and services diesel and natural gas engines, electric power generation systems, and engine-related component products worldwide. It operates in four segments: Engine, Power Generation, Components, and Distribution. The Engine segment offers a range of diesel and natural gas powered engines under the Cummins and other customer brand names for the heavy-and medium-duty truck, bus, recreational vehicle, light-duty automotive, agricultural, construction, mining, marine, oil and gas, rail, and governmental equipment markets.

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