Cummins Inc. (CMI) - Get Report is rebounding quite well this afternoon. The stock is headed for a 1.5% gain on accelerating trade, an impressive move that has pushed shares well above last week's high. After basing near major support over the last two weeks, CMI is setting well for a healthy rebound. Investors should consider this A- rated stock a low-risk buy near current levels.
Shortly after reaching new 2017 highs in late July, CMI took a very damaging hit on Aug. 1. This earnings inspired flush attracted a massive selling wave that drove the stock down over 6%. CMI began to test a major support zone two weeks later and has been stabilizing since. Now that shares are beginning to attract interest once again a very low risk entry opportunity for patient bulls has developed.
In the near term investors should consider CMI a buy between $154.00 and $152.00. If the stock can continue to build a base above its 200-day moving average a rebound move from its deeply oversold reading could be quite powerful. On the downside, a close back below $150.00 would violate the August low sending a clear warning sign in the process. Until then, IR is on steady ground and poised to rally.
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