Deere Trying to Break Loose Before China DealTractor maker Deere might be setting up for a breakout as the U.S. and China move toward a trade deal.
DE has been consolidating in an extremely tight range for the last four weeks. It's pressed against near-term resistance around $177. Meanwhile the 50-day simple moving average (SMA) has squeezed up from below as support.
The company's backward-looking results haven't been terrific. Management guided lower on November 27, citing the trade war. But now the market is looking past that with Vice Premier Liu He scheduled to sign "phase one" at the White House on January 15.
Agricultural exports to the Asian country are a big part of that deal. DE is perhaps the most straightforward name for large institutional investors in the U.S. to position for the news.
Buyers may get more active if DE breaks the weekly high near $177. The 50-day SMA can be used for risk management if it goes the other way.
DED trade ideas
DE Earnings"USDA currently projects farm income in 2019 to reach $88 billion – the highest net farm income since 2014’s $92 billion, but still 29% below 2013’s record high. In addition, nearly 40% of that income – some $33 billion in total -- is related to trade assistance, disaster assistance, the farm bill and insurance indemnities and has yet to be fully received by farmers and ranchers (Is Farm Income Really Up?)."
Quote from- www.fb.org
This leads me to believe that we will see more negative news from Deere's earnings.
Since Oct 18 EPS has missed expectations.
Chickens don't require tractors. Yes it'll increase grain needs for the chicken to eat and what not, but how many brand new tractors do you need per chicken? If my numbers are correct, every 50 lbs of feed (which is only $15) feeds 4 chickens fully grown for a week.
Wheat is currently $5.1525 per bushel, or approximately $191.16 per acre.
Farmer's are broke unless they're growing hemp.
There was a spike in total revenue Q2
This is all speculation. Not advice.
DE Restest/RemountDE has now retested its prior resistance now support level at $171. Since it has remounted nicely at the $173 level and looking to reach new highs at a target of $180. It has been caught in a breakout range of $170-175, with the now retest and remount i'm looking for it to break beyond these levels with a stop alert at $171
$DE Can DEERE breakout soon ?Resistance has held at $170 despite several very bullish attempts to break through, once gain the price is at that level, and everything is aligning perfectly .
All MA's are bullish and proper sequence.
RSi is also trying to hit a high
MACD and Histogram are in bullish formation.
P/E 16 (reasonable)
Market sentiment is the biggest concern and tomorrows trade talk outcome will determine the long term direction of the stock, if it is a break higher it should be very frantic given the duration of this congestion phase.
Giving DE Short another shot!It doesn't get much more clear as the line in the chart above. We are right at resistance in my most despised trade war stock, DE. The reluctance for this stock to roll over despite tons of bad news, terrible earnings and terrible guidance has been uncanny. I think DE is especially vulnerable here with no good news in the trade war in sight. Let's short DE here.
Short @ 152.60
Target 1: $146
Target 2: 141
Stop on a an hourly closing basis through the drawn line (about ~$1 higher).
$DE #John Deere ShortCurrently in a long put debit spread. Looking to tag bottom of bollinger.
With the current trade war, and farmers being hammered in the midwest, we have technical analysis supporting the bearish macro narrative. Tough year on farmers, isn't the year they are going to be making investments in new big AG equipment.
Trading it short while also COLLECTING time premium. So there is no option decay - you actually get a small gain because of this.
John Deer DE double top and divergenceInteresting chart on DE its been toying with the top at around $170 for a while and pushing up to it today again. The MACD shows we should be down around $165. Not a big move down, bu the AUg 9 expiration 165 puts are at under a dollar so we'll grab a few for a pullback next week.
Deere ascending wedge upward breakoutDeere has surged upward through both recent highs and the top of its ascending wedge today. I don't love entering when it's so overbought and we're still 4 days away from the corner of the wedge, so I will hope for an oscillation downward. (But oh, the FOMO! Maybe I'll enter if we hold above the wedge and also close a bar above the Hull Moving Average.)
Long ATM Straddle John Deere with LOW IVR = CHEAPWe purchased an at the money straddle for a small debit of only 3.22. This trade is notably cheap because the IVR is extremely low: 2%. Being a long straddle (buying the calls and puts at 165), we are giving ourself unlimited profit, risking a limited $322 per contract.
We take our neutral position because of the positive characteristics of the trade itself, but the fundamental conditions further our thought. With an equity value of over 51 billion, John Deere is a company with significantly large exposure to China, and Chinese trade tensions. Also, interest rates have a somewhat direct effect on the profitability of this corporation. Financial Services comprises 9.2% of Deere's market cap, so as cuts in July become more of a reality, the profitability of the Financial Services division will be affected, possibly drastically. Lower rates mean lower borrowing costs for Deere, and could cause the stock to move outside of the breakevens to lead to profits.
Also, the technicals indicate the high possibility of large movements prior to maturity. The RSI, MFI and Stochastics all indicate an overbought sentiment, and the DMI DI+ and DI- indicate change in direction. The PSaR also has recently switched direction.
DE - Bull Put Credit SpreadPA sell off last few days to Mid BB%
Daily RSI Oversold after recent decline.
Found S&R at 160 level. Looking for consolidation and then reversal to mean back higher.
Aiming for 160/155 Put Credit & 165 Call option for Directional bias higher.
Exp Aug 16 (...but selling to close in Profit well before that.! )
Good Luck - Watch YOUR RISK