Deere & Company (NYSE: DE)

Deere & Company manufactures and distributes various equipment worldwide. The company operates through three segments: Agriculture and Turf, Construction and Forestry, and Financial Services.

Take a look at the 1-year chart of Deere (NYSE: DE) below with added notations:

After forming a clear 52-week high resistance level at $170 (green), DE broke through it earlier in October. The stock moved higher, as traders might expect, and now appears to be pulling back to the key breakout point at $170. A support bounce should develop near that level.

The Tale of the Tape: DE broke its 52-week resistance at $170. The possible long position on the stock would be on a pullback down to that level with a stop placed under it. A break back below $170 could negate the forecast for a move higher.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!
Christian Tharp, CMT