Deere Is Seeing Green After Earnings: How to Trade the Stock Now

Despite trade issues and the coronavirus DE has managed to turn in good numbers.
Stocks quotes in this article: DE

Deere & Company (DE) rallied to the top of its trading range and is still pushing higher Friday as traders and investors liked the company's latest earnings figures. DE beat expected EPS and revenue numbers handily. Prices have gapped to the upside so let's put on our green baseball cap and check out the charts. 

In the daily bar chart of DE, below, we can see that prices have quickly responded to the fundamental news and have gapped higher. Prices were above the 50-day moving average line and the 200-day moving average line coming into Friday. The slopes of both averages are likely to turn positive in the days ahead.

The On-Balance-Volume (OBV) line has been steady since early November and remained firm even when the price of DE declined. A new high in the OBV line is likely by Friday's close.

The Moving Average Convergence Divergence (MACD) oscillator gave a cover shorts buy signal earlier this month and should cross the zero line soon for an outright go long signal.  

 
In the weekly bar chart of DE, below, we can see that prices are above the rising 40-week moving average line. Prices are likely to make a new weekly high close Friday.
 
The weekly OBV line shows a long-term (three year) uptrend to support the price gains. The MACD oscillator on this longer time frame is above the zero line and could cross to the upside in the weeks ahead.  
 
 
In this daily Point and Figure chart of DE, below, we can see the morning gains without a price gap. DE has made a new high for the move up and a $212 price target. 
 
 
 
Bottom-line strategy: Bears will have a hard time arguing with a gap higher and new highs. Despite trade issues and the coronavirus DE has managed to turn in good numbers and the charts have responded in kind. Trade DE from the long side, looking for the $212 as our first price target.
 
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TAGS: Earnings | Investing | Stocks | Technical Analysis | Agriculture | Industrial Goods

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