Deere & Company (DE) - December 31, 2024

Shares of Deere & Company (DE) have underperformed in 2024, but the SIA platform may have detected an early shift. Since mid-August, DE shares have risen from near rock-bottom levels, albeit still in the "Unfavored" zone of the SIA S&P 100 Index Report. This movement prompted a closer examination of the company's share performance, and the findings may be noteworthy to advisors invested in the space. The shift in DE’s position on the SIA S&P 100 Index Report is illustrated in the attached matrix position chart. A red line marks the point where DE shares are ranked at their highest levels in several years. After dropping from the "Favored" zone in mid-2023, DE shares experienced relative underperformance. Although their value didn’t drastically decline, they remained stagnant, moving sideways for nearly two years rather than increasing in price. Currently, DE ranks 58th on the SIA S&P 100 Index Report. Year-to-date, shares are up only 7.39%, compared to an 18.76% increase in the SIA S&P 100 Equal Weight Index. In contrast, Caterpillar Inc. (CAT) has seen a 24.75% increase in its share price. CAT was positioned in the "Favored" zone for much of the year but has recently moved into the "Yellow Neutral" zone. Digging a little deeper, a direct comparison of Deere (DE) to Caterpillar (CAT) using a point-and-figure chart built with a 2% scale is insightful. This scale smooths out shorter-term fluctuations and provides an intermediate-duration comparison. Since 2018, DE shares had outperformed CAT until mid-2022, when performance began to favor CAT. The second black arrow on the chart marks this shift, highlighting a distinct period of underperformance for DE. Recently, however, the comparison has become more balanced, with the chart moving sideways. The potential for a breakout in favor of DE makes this comparison chart an interesting one to monitor for further developments. This shift may manifest either through a pullback in CAT’s share price or an increase in DE's share price, or possibly both.

Turning to the point-and-figure (PNF) chart for Deere & Company, the shares are pushing to new all-time highs, and a recent bullish PNF chart signal has been triggered with a spread triple top on the 2% PNF chart. This occurs against a chart that had prior resistance at the $439.98 level for several years. Although the main coach relative strength still positions the shares as underperformers, they are building relative strength as they rise up the matrix of the SIA S&P 100 Index Report, just as CAT shares are declining down that matrix. While this isn’t enough to prompt SIA practitioners to add a red zone underperformer, it is noteworthy and represents a developing story. During the last period of outperformance, as illustrated by the green oval, shares rallied from the $170 level to $380 before drifting sideways and entering a consolidation period that underpinned its underperformance. DE shares currently have a SIA SMAX score of 8 out of 10, which provides a near-term reading of relative strength compared to other asset classes. Support is currently at the 3-box reversal levels of $422.90, $383.03, and $375.52, while resistance is calculated using a vertical point-and-figure count to $505.40, aligning with the psychological whole number of $500. To the upper side, this resistance calculation can be extrapolated out to $580.55 with a horizontal point-and-figure count.