Shares of Caterpillar (CAT) - Get Report are moving well today. The stock is up over 2%, making it one of the top gainers in the  Dow Jones Industrial Average. This powerful breakout-type move has driven Caterpillar to new September highs. The stock's 10-week consolidation appears to be giving way to a new rally leg.

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After back-to-back strong gains in late July, Caterpillar ran out of momentum. As the month came to a close, it was clear that the stock was entering a consolidation stage. In August, Caterpillar made a slightly higher high while it held in a very narrow range. This healthy action continued into September as the stock held above a very solid support zone near $80.

Just last week, Caterpillar was challenging the upper band of the consolidation before fading once again. With today's impressive gain, Caterpillar investors should be very encouraged. A clear breakout of this pattern could carry shares quite a bit higher.

In the near term, Caterpillar bulls should key on the August high near $84.75. A move past this level would put shares at new 52-week highs. Until then, the stock should be considered a low-risk buy between $84.50 and $82.50. A close back below this week's low of $81.65 would indicate that more consolidation is ahead before a new rally leg can take hold. On the upside, Caterpillar should face some resistance near the $86 area. The stock's 40-week moving average is here. The last time this long-term indicator was tested was back in January of 2015. Caterpillar began a very steep decline after being rejected at the 40-week moving average.

Disclosure: This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.