The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.By Scott Pluschau NEW YORK ( ETF Digest) -- Caterpillar ( CAT) posted third-quarter record sales and revenue for the company Monday. In their news release I read that they have added more than 30,000 jobs to their global workforce since the beginning of 2010 and the stock lifted over 5% today. Caterpillar is the world's leading manufacturer of construction and mining equipment and has seen strong growth in the developing world as well, so I decided to take a look at the daily chart of the iShares Emerging Markets Infrastructure Exchange Traded Fund ( EMIF).
About a week later a "double bottom" pricing pattern then formed when EMIF broke above the high point in the middle of the letter W on the chart, and that would have been the next logical entry point in my opinion to add to the trade. A double bottom is a classic technical analysis reversal pattern. Shortly thereafter a rectangle consolidation range formed and today we had a breakout. The breakout offered another opportunity to add for a third time. The profit-taking target of the double bottom (top of the middle peak of the W to the low of the W) has now been reached and so has the target of the rectangle (width from the top to the bottom of the rectangle) as well. This breakout has also offered the ability to trail a stop loss on the original position to beneath this consolidation range, locking in some further gains, and also letting some of the position ride until a new sell signal presents itself. Should EMIF get above $31 per share, the path of least resistance is upward. I know this is all easy "after the fact", but I wanted to point out some of these trade setups because I believe each one is likely to present themselves again in another market in the future. The more we keep studying the patterns of supply and demand in past charts, the quicker our eye will become in real time. Dave Fry has a great article on the Top Ten Global Building Infrastructure ETFs.