Shares of Cummins Inc (NYSE:CMI) are moving well today. Yesterday’s upgrade from UBS, from ‘Neutral’ to ‘Buy,’ is attracting interest. The stock is heading into the final hour with a 4.6% gain putting it in the top 10 gainers list of the S&P 500 Index. CMI has been consolidating in a narrow range since reaching new all-time highs in mid August. This healthy sideways action has allowed the stock to work off the overbought levels it reached shortly after a very solid Q3 earnings report. CMI is setting up for a fresh rally leg. A close above $216.00 could spark quite a move.
We consider CMI a fairly low risk buy at current levels despite a gain of just over 100% from the 2020 lows. On the downside, a close back below $202.00 would indicate more sideways action will be needed before a fresh rally leg can take hold.
Gary S. Morrow's original post can be read here.