Cummins (CMI) Moves to Hold
Cummins, which makes engines for trucks, heavy machinery and other industrial and transport applications, fell 4.6% on Friday after Tesla unveiled its new electric semi-truck, increasing competition in the long-haul trucking market. Cummins also held an analyst day on Friday, but apparently failed to impress.
CMI has struggled since reporting earnings on October 31, and Friday’s move brings the stock’s total return this month to 11%. The stock is now trading around 159, just a few cents above its 40-week moving average. The long-term uptrend remains intact; CMI has been trending up since the start of 2016 and moved higher for nine consecutive weeks earlier this fall. But this is the stock’s second concerning pullback in four months, following a 10% correction in August.
I’m moving CMI to Hold today and recommend waiting until it reverses course to start new positons. To the downside, we’ll be watching the 40-week moving average and the 150 level, where the stock bottomed in August.