Most investors don’t know it, but wholesaling used cars is a red-hot business. This is why Cop...
Deere Caught in Headlights
04/19/2013 7:00 am EST
The agriculture and forestry equipment manufacturer's ongoing correction could be part of a healthy pullback, or a reversal from its upward trend, writes the staff at Commodity HQ.
The bears swooped in on Wall Street right at Monday's opening bell as weaker-than-expected China GDP data sent a wave of worry across equity markets around the globe. Profit taking pressures also returned to the precious metals market at the start of the week, sparking a massive sell-off in gold; the yellow metal dropped upwards of $150 an ounce on Monday, sending the prices well below the $1,400 mark in just a matter of hours.
Amid the ongoing tug of war between the bulls and bears, agriculture and forestry equipment manufacturer Deere & Co. (DE) presents an intriguing opportunity at the moment that warrants a closer look from swing traders looking to get a piece of the action on Wall Street.
Consider Deere's one-year daily performance chart below. This agriculture stock has enjoyed a nice steady uptrend (green line) since bottoming out in early June 2012, and then moving up through its recent peak of $95.60 per share. DE's decline over the past two months appears to be a healthy correction when considering the longer-term uptrend at hand along with the stock's ability to hold its head above the 200-day moving average (yellow line) in recent weeks. Plain and simple, DE's chart looks like a "buy" at the moment as traders can establish a long position in anticipation of a rebound while still closely managing downside as this stock is trading near a major support level (yellow line).
Before jumping in long, investors should take note of the potential trend reversal that may be brewing; since peaking at $95.60 per share in late January 2013, this stock has posted a series of consecutive lower-highs (red line) and lower-lows, perhaps hinting at a potential trend reversal. As such, we advise using a tight stop-loss for anyone looking to take a long position at current levels in case our bearish suspicions prove correct.
DE's chart pattern is sending mixed signals as the ongoing correction can be interpreted as either a healthy pullback or a sign of a trend reversal. From a technical perspective, this stock has major support around $82-$84 per share; in terms of upside, DE could face selling pressures as it nears the $88 level. As always, investors of all experience levels are advised to use stop-loss orders and practice disciplined profit-taking techniques.
By the Staff at Commodity HQ
Related Articles on STOCKS
When it comes to new technology, nothing’s quite as cutting edge as driverless cars, or autono...
Marathon Oil (MRO) has been divesting many of its international operations over the past three years...
Robust market action actually has been tempered by trade concerns as they put pressure on so many ol...