Deere & Company (DE) was rated a new fundamental buy here on Friday by a sell side firm with a $486 price target. The charts I look at suggest a much lower downside price objective for the farm equipment giant, so let's review the charts of Deere, which is a holding of the Action Alerts PLUS portfolio.
In this daily bar chart of DE, below, I can see that prices have traded sideways the past year in a choppy and hard-to-trade pattern. Prices are now hugging the 50-day moving average line as well as the 200-day line. Trading volume is hard to read while the On-Balance-Volume (OBV) line has moved lower since December. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line but shows some improvement.
In this weekly Japanese candlestick chart of DE, below, I see a mixed picture. Prices have chopped sideways to higher for nearly three years. DE has been trading around the 40-week moving average line. The weekly OBV line has been neutral since November. The MACD oscillator is slightly above the zero line and correcting to the downside.
In this daily Point and Figure chart of DE, below, I can see the software is projecting a potential downside price target in the $333 area.
In this weekly Point and Figure chart of DE, below, I see the same $333 price target as the daily chart above.
Bottom line strategy: The charts above suggest that DE is more likely to trade lower in the weeks ahead. And if you'd like a detailed analysis at Deere's last earnings release, check out this Aug. 18 piece from Real Money's Stephen Guilfoyle.
(DE is a holding of Action Alerts PLUS. Want to be alerted before the portfolio buys or sells these stocks? Learn more now.)
