Deere (DE) was reviewed recently, where I wrote, "Momentum is slowing and prices are extended but that is not a reason to sell DE. A price reversal would be a reason to sell but that has not happened. Meanwhile, it would not hurt to raise sell stops to a close below $145 or below the 50-day moving average line." One of the quickest ways to spot a price reversal is to use Japanese candlestick charts. A reversal can be from up to down and it can be from up to sideways.
In this daily candlestick chart of DE, below, we can see a bearish engulfing pattern on Friday and Tuesday due to the holiday and market closure. Prices have only moved sideways instead of lower since the engulfing pattern but that still is a reversal using candlesticks. Prices are still above the rising 50-day moving average line as well as the rising 200-day average. The On-Balance-Volume (OBV) line has leveled off this month and suggests that the buying and selling pressures for DE are in balance for now. The daily Moving Average Convergence Divergence (MACD) oscillator is close to another take profits sell signal.
In this weekly bar chart of DE, below, the only warning flag is the slowing volume pattern. Prices are extended above the rising 40-week moving average line. The weekly OBV is still bullish as is the rising MACD oscillator.
Bottom line -- I saw a little more risk on DE than earlier this month. I suggest raising sell stops to a close below $150 now.
