Iconic Deere Is Losing Traction After Disappointing Guidance
A break below this zone of potential support will open the way to further declines.
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Equipment maker Deere & Company DE reported both top-line and bottom-line beats this Thursday morning but investors sold shares on the company's disappointing full-year outlook.
Let's put on our trusted green and yellow baseball cap and check out the charts and indicators.
In the daily bar chart of DE, below, I can see that the shares made a high in late December and a lower high in late January. DE gapped lower Thursday and continues its weakness below the 50-day and 200-day moving average lines.
The On-Balance-Volume (OBV) line has been weak for much of the past year and shows weakness from late January. A declining OBV line happens when trading volume is heavier on days when prices close lower. This tells us that sellers are being more aggressive than buyers.
The Moving Average Convergence Divergence (MACD) oscillator is crossing below the zero line now for an outright sell signal.
In the weekly Japanese candlestick chart of DE, below, I see a weakening long-term picture. The shares have declined the past year with lower highs but so far equal lows in the $360-$345 area. A break below this zone of potential support will open the way to further declines. The 40-week moving average line has a negative slope.
The weekly OBV line has been weak since December of 2022. The MACD oscillator is below the zero line.
In this daily Point and Figure chart of DE, below, I can see it is projecting a downside price target in the $337 area.
In this weekly Point and Figure chart of DE, below, I can see a target in the $332 area.
Bottom-line strategy: DE may hold the $360-$350 area but I kind of doubt it in a weak broader market environment. Avoid the long side of DE for now.
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