Are Traders Expecting Strong Numbers From Deere?

The shares are up sharply, so let's check out the charts.

Deere & Company (DE) is not anticipated to report earnings until Feb. 18 before the opening of trading that day. However, the shares are up sharply Tuesday and are "knocking on" an upside breakout.

We looked at DE on Jan. 5 and wrote that "Aggressive traders could go long DE at current levels risking to $345 this time. Our price targets for now are $405 and then $483."

In light of today's trading action, let's check out the charts again.

In the updated daily bar chart of DE, below, we can see that the shares have made a large saucer-like pattern going back the past nine months. A "neckline" could be drawn across the highs from early May and prices are testing that neckline now. Interestingly, DE has made higher lows since October when the broad market averages have been particularly weak. DE is trading above the rising 50-day moving average line and the flat 200-day line.

The On-Balance-Volume (OBV) line declined to early January but has since turned upwards telling us that buyers of DE are being more aggressive than sellers. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line and close to an upside crossover and new buy signal.

 

In the weekly Japanese candlestick chart of DE, below, we see a bullish setup. Prices are in a longer-term uptrend. DE trades above the flat 40-week moving average line.

 

The weekly OBV line is positive and the MACD oscillator has recently turned upwards to a new buy signal.

 

 

In this daily Point and Figure chart of DE, below, we can see an upside price target of $439. A trade at $392 will be a new high for the move up on this chart and should refresh the uptrend.

 

 

In this weekly Point and Figure chart of DE, below, we can see a longer-term price target of $495.

 

 

Bottom-line strategy: Traders should still be long DE from our earlier recommendation as our $345 stop was not reached. Continue to hold longs and aggressive traders could add on strength above $392. Raise stops to $360 from $345. Our nearest price target is $439.

(Deere is a holding in the Action Alerts PLUS member club. Want to be alerted before AAP buys or sells DE? Learn more now.)

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