Deere & Co - (DE) - December 12, 2023
At SIA Charts, we compare head-to-head battles of thousands of stocks, commodities, mutual funds and exchange traded funds daily and rank them by who is winning the most in their respective universes. The top 25% are considered the Green Favored Zone, 26-50% make up the Yellow Neutral Zone and the bottom half of each league table is considered the Red Unfavored Zone.
Agricultural, forestry, machinery, and heavy equipment manufacturer Deere & Co. (DE) has been steadily sinking since it joined the SIA S&P 100 Index Report in the neutral zone back in September. Since it entered the report, it has declined by 13.8%, including a decline of 2.2% since it fell into the Red Unfavored Zone about a month ago, right about the time that broader markets took off. In comparison the comparable index ETF is up 3.8% in the last month.
Deere’s decline down the relative strength rankings has steepened and accelerated in recent weeks. In the last month, it has dropped 29 spots to 81st place.One of the differences between bar/candlestick charting and point and figure charts that often confuses investors is how similar terms can mean different things. For example, the Triple Top. In point and figure charting a pattern is called a Triple Top when it is successfully completed, a bullish Triple Top breakout to the upside.
On the other hand, in bar and candlestick charting, a Triple Top is considered bearish, representing resistance that held and a failed breakout attempt. An example of this is the Deere & Co (DE) chart. Over the last 18 months, three attempts to break out over $440.00 have failed, a bearish Triple Top.
To make things worse, the shares have taken out a trend support line, causing what had been a pending bullish ascending triangle pattern to fail. Combined, these bearish failures suggest that DE has come under distribution, a close below $355.00 support would confirm the start of a new downtrend. Should that occur, next potential support may appear near $325.00 or closer to the $300.00 round number. Initial upside resistance appears at the 10-week moving average just below $375.00.
Since completing a big rally back in 2021, Deere & Co (DE) shares have essentially been trending sideways in a wide range between around $320.00 and $440.00. The shares have attempted to really break out, once in the spring of 2022 which was somewhat successful, then at the end of 2022 and the summer of this year, which faltered near the top of the range.
In recent months, the shares have started to come under distribution, establishing a lower high in September, and completing a bearish Double Pattern in October. The decline has extended into a bearish Low Pole over November and into December.
Currently, DE is testing an uptrend support line. A close below $359.20 would signal that support has failed and a new downleg has commenced. On a breakdown, next potential downside support appears near $338.45, $325.35 and $312.70 on trend, based on previous column lows. Initial resistance on a rebound appears near $396.40, just below the $400.00 round number, based on a 3-box reversal.
With a bearish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 3 out of 10, DE is exhibiting short-term weakness against the asset classes.
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