Deere & Co. (DE) has been in rally mode since their March low - climbing three fold from the nadir. Prices have stayed in an uptrend bouncing off the rising 50-day moving average line. Is a change in direction under way? Let's check the charts.
In this updated daily bar chart of DE, below, we can see some subtle changes to the indicators in the past two months. Prices are still pointed up and trade above the rising 50-day moving average line and the rising 200-day moving average line.
The On-Balance-Volume (OBV) line tells a different story as it has weakened since the middle of January suggesting a shift from aggressive buying to aggressive selling.
The 12-day price momentum study shows a lower high from January to February telling us that the pace of the advance has slowed. This is a bearish divergence when compared to the price action which shows higher highs from January to February. A bearish divergence is a leading indicator and not a hard and fast sell signal.
In this weekly Japanese candlestick chart of DE, below, we can see a mixed picture. The most recent candle pattern could be a doji and mark a top reversal but it needs confirmation.
The weekly OBV line is still pointed up but the 12-week price momentum study has been slowing.
In this daily Point and Figure chart of DE, below, we can see a potential price target in the $390 area. We can also see that a pullback to $288 could weaken the picture.
Bottom line strategy: On October 13 we reviewed the charts of DE and recommended a defensive posture. Prices pulled back into month-end but then resumed their rally and even passed our $269 price target. Again, I would take a cautious stance.
