Deere Is in a Well Structured Setup

Published on Thursday, 12 July 2012 05:36 Written by TradersHuddle Wire

New York, July 12th (TradersHuddle.com) - Deere & Company (NYSE:DE) closed the trading day at $78.16, near its 50 day and 200 day moving averages set at $76.78 and $78.32 respectively. Deere's price action placed the stock above the 50 day moving average but below its 200 day moving average, providing a nice trading setup with clear reference points.

Deere & Company (NYSE:DE) manufactures and distributes farm equipment and related service parts used in construction, earthmoving, material handling and timber harvesting. It also provides financing to dealers of new and used agricultural, commercial and consumer, construction and forestry equipment.

Deere seems to be setting up for a tight range between the 50 day moving average as support and the 200 day moving average serving as resistance.

A tiered approach appears to be the best way to maximize possible movements in the stock, as traders could establish a small position in Deere and wait for the stock to break out above the 200 day moving average at $78.32. Then they could add to the position as momentum builds with the breakout. On the other hand, if support being referenced at the 50 day moving average set at $76.78 breaks, it could signal further downside for Deere in the horizon.