Deere & Co. engages in the manufacture and distribution of equipment used in agriculture, construction, forestry and turf care. It operates through the following segments: Agriculture and Turf, Construction and Forestry and Financial Services.
Take a look at the 2-year chart of Deere (NYSE: DE) below with added notations…
After failing to hold its $400 breakout level (blue), DE fell all the way back down to major support at $320 (yellow) and broke it. The break of such a major support implies much lower prices to come for DE. A hold back above $320 could negate the bearish forecast.
The Tale of the Tape: DE broke major support of $320. Traders could enter a short play now, or on any rallies up to $320, with a stop set above the price of entry.
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!
Christian Tharp, CMT
Do not trade options until you watch my urgent message: