Shorting Deere's (DE) dead cat bounce!
Updated
In the middle of May, Deere reported earnings during what was a massive cascading sell-off in its stock. Their main issues for poor guidance were the China tariffs and the fact that they had begun to hurt the revenues of farmers and therefore the machinery that Deere sold to farmers. The stock took yet another spill after earnings and managed to bottom around $132 before embarking on an impressive 17% rally in 20 trading sessions.
Today, at the top of this rally, Baird came out and upgraded the stock! I believe this is a prime example of analysts being late to the party as the upgrade has forced the stock to rally right into previous support (now resistance in the 154-155.50 level. The China situation has only gotten worse and farmers continue to struggle despite Trump's many attempts to inject cash into their pockets.
I believe we can short DE between 153.50 and 155.50 with the following parameters:
Target 1: $147
Target 2: $132
Stop: 158
Today, at the top of this rally, Baird came out and upgraded the stock! I believe this is a prime example of analysts being late to the party as the upgrade has forced the stock to rally right into previous support (now resistance in the 154-155.50 level. The China situation has only gotten worse and farmers continue to struggle despite Trump's many attempts to inject cash into their pockets.
I believe we can short DE between 153.50 and 155.50 with the following parameters:
Target 1: $147
Target 2: $132
Stop: 158
Trade active
Trade closed: stop reached
Stopped out almost immediately the next day thanks to a Trump tweet.
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