Deere & Co. (DE) , the iconic U.S. farm equipment maker, reported their latest EPS figures which beat estimates by $1.32, and beat on revenue. The stock price is up today but the bigger picture to me as a technical analyst is that prices broke out on the upside from a large consolidation pattern. Let's look.
(For more on DE, see Stephen Guilfoyle's For Deere, Here's Where I Venture a Purchase, but I Wouldn't Chase it Today)
In this daily bar chart of DE, below, we can see that prices have nearly doubled since its March low. DE is trading firmly above the rising 50-day moving average line and the bullish 200-day moving average line.
The On-Balance-Volume (OBV) line has been working its way higher and telling us that buyers of DE have been more aggressive.
The Moving Average Convergence Divergence (MACD) oscillator turned bullish by the end of May and is still telling us that this advance is strong.
In this weekly bar chart of DE, below, we went back four years to show the large consolidation pattern. Prices largely traded between $130 and $180 for about 2-1/2 years before breaking out on the topside. DE is above the rising 40-week moving average line.
The OBV line shows strength and the MACD oscillator is bullish and rising.
In this daily Point and Figure chart of DE, below, we can see that the software has counted up the X's and O's to project an upside price target in the $245 area.
In this weekly Point and Figure chart of DE, below, we can see a potential $269 price objective.
Bottom line strategy: I wish I noticed the upside breakout on DE sooner but there is still plenty of upside according to our Point and Figure charts. Traders could go long DE here risking a close below $180 for now. $245 and then $269 are our price targets.
