Is Deere Caught in the Headlights?

Deere & Co DE is known around the world and its equipment is key to our global food production and more. However, Deere's share price has been struggling for the past year and is once again poised to test a key support area. 

Will prices hold yet again or has the risk of a breakdown increased?

Let's check out the charts and indicators.

In the daily bar chart of DE, below, I can see that the shares bounced higher in June but failed at the underside of the declining 50-day moving average line and at the underside of the declining 200-day moving average line. The trading volume has increased in recent sessions, suggesting to me that sellers of DE are now becoming more aggressive. 

The On-Balance-Volume (OBV) line has slowly weakened from the middle of April. The Moving Average Convergence Divergence (MACD) oscillator is in a bearish alignment below the zero line.

In the weekly Japanese candlestick chart of DE, below, I can see the past three years of price movement. For the past two years rallies in DE have failed at lower and lower highs. This is a sign of weakness. Buyers, however, have been coming into the market when prices reach the $360-$350 area but it looks like that buying interest may be close to being "spent." The slope of the 40-week moving average line is negative. 

The weekly OBV line has been declining since the end of 2022. The MACD oscillator is in a bearish alignment below the zero line.

In this daily Point and Figure chart of DE, below, I can see a potential downside price target in the $313 area.

In this weekly Point and Figure chart of DE, below, I can see the same downside price target of $313. The same as the daily chart above.

Bottom-line strategy: DE has a global reach and sells its tractors, etc. around the world. If the shares of DE look weak I wonder what that says about the global economy. Avoid the long side of DE for now.

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