4 Trade Ideas for Deere: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Deere, $DE, comes into the week in a bull flag under resistance and the 200 day SMA. A Measured Move out of the flag would give a target to 377, near the September high. Continuation from there above the August higher would confirm an intermediate trend higher. The RSI is holding just under a move into the bullish zone with the MACD crossed up and about to turn positive.

There is resistance at 360 and 363.50 then 375.50 and 392.50 before 396.50 and a gap to fill to 401.60. Support lower comes at 349.50 and 343.75. Short interest is low at 1.1%. The stock pays a dividend with an annual yield of 1.27% and has traded ex-dividend since September 29. The company is expected to report earnings next on November 23rd.

The October options chain shows open interest light and spread out on both the calls and puts. The November chain has open interest build from 380 to a peak from 310 to 290 on the put side. On the call side it builds form 340 to a peak at 400. The November 25 Expiry, covering the earnings report, just started trading last week and has no open interest yet. The December options show large open interest at the 310 put with much smaller amounts spread from 340 to 440 on the call side.

Deere, Ticker: $DE

Trade Idea 1: Buy the stock on a move over 360 with a stop at 349.50.

Trade Idea 2: Buy the stock on a move over 360 and add a November 25 Expiry 350/330 Put Spread ($9.00) while selling the December 400 Calls ($7.00).

Trade Idea 3: Buy the October/November 370 Call Calendar ($7.80) while selling the November 320 Put ($6.00).

Trade Idea 4: Buy the December 310/370/400 Call Spread Risk Reversal ($4.50).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with the first week of October in the books, noted that equity markets continued the trend lower after a big 2 day tease at the start of the week to the upside.

Elsewhere look for Gold to continue its bounce in the downtrend while Crude Oil is possibly reversing higher out of its downtrend. The US Dollar Index continues the strong move to the upside while US Treasuries continue their downtrend. The Shanghai Composite looks to continue the move lower after a week off while Emerging Markets continue the long term downtrend.

The Volatility Index looks to remain elevated and possibly moving higher making the path easier for equity markets to the downside. Their charts also look weak, especially on the shorter timeframe where the SPY and QQQ are back retesting the cycle lows while the IWM is faring only slightly better. On the longer timeframe the candle prints for the week signal indecision but with long upper shadows indicating further weakness. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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