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China stocks are popping, and history shows that means these Dow stocks should be winners

Key Points
  • China's Shanghai Composite Index surged more than 4 percent on Monday.
  • History shows Caterpillar and Boeing are among the biggest Dow winners when China's stocks pop, according to CNBC analysis using Kensho.
  • It may be a quick trade, however, if the Chinese government's efforts to boost their market don't last.
Sentiment has turned very strong towards China, analyst says

China's Shanghai Composite Index surged more than 4 percent on Monday as authorities took steps to boost stock prices in the face of a slowing economy. History shows certain U.S. stocks are positively correlated to big up moves by China's equities.

One in particular — Caterpillar — tends to do really well.

CNBC used analytics tool Kensho to look at what happens to members of the Dow Jones Industrial Average when the Shanghai jumps 2 percent or more in a single day.

Here are the biggest winners when U.S. trading opens following a big day for China stocks:

Source: Kensho

Caterpillar's success is closely tied to global manufacturing, so as China takes steps to support its markets, that should give a boost to the company. Caterpillar shares were up 1.4 percent in premarket trading Monday.

Other winners include Disney, Cisco and Boeing.

This could be a quick trade, however. If the Chinese government's efforts don't work and Chinese stocks return to their bear market, Caterpillar and other Dow stocks could suffer.

(UPDATE: Caterpillar shares are now lower after opening higher as the broader market rolled over.)