John Deere (DE) Stock Chart Breakout

I first wrote about John Deere (DE) starting back in January 2017. It was my first article on the company in my 5 year history for Trendy Stock Charts.

After President Trump won the election, a Trendy Stock Charts member requested that I cover some “Trump” stocks. The stocks I picked for my first article based on “Trump” stocks were John Deere (DE) and Caterpillar (CAT). After all, there was talk about significant infrastructure spending with Trump as President.

In that January 2017 article, I compared the charts for John Deere (DE) against the charts for Caterpillar (CAT). I was comparing the charts to see if one has greater potential for price gains than the other. I discussed a John Deere (DE) stock chart breakout that appeared to be in progress.

Based on the chart analysis in that article, I concluded that John Deere’s (DE) share price had the potential for greater returns when compared to Caterpillar’s (CAT) share price.

So was I right? Here are the resulting returns since my January 2017 article  titled “1/21/2017 – Caterpillar (CAT) & John Deere (DE)“:

John Deere (DE) is the clear winner with a return of 20.11% vs 14.09% for Caterpillar (CAT). DE’s share price earned a full 6% more than CAT’s share price. With DE’s current uptrend, its percentage return is only going to keep increasing at a faster pace.

However, while John Deere (DE) is the clear winner by both dollar and percentage returns, you really couldn’t complain about a 14% return for Caterpillar (CAT) either. That 14% return is less than a half year return. If Caterpillar (CAT) can keep the pace, it could offer a 30% return Y-T-D.

However, this article is going to focus on John Deere (DE), the winner of the competition. Unless there is request from a Trendy Stock Charts member, I can look at the stock charts again for Caterpillar (CAT) and re-analyze its upside potential at a later date.

With John Deere’s (DE) share price at $128.21, it is in the range of profit taking that I mentioned in the January article. Does it have the potential to keep going? Let’s start reviewing the John Deere (DE) stock chart breakout that has been in progress and see what sort of upside potential seems to remain.

John Deere (DE) – Long-Term Breakout

This first chart is a 10 year monthly candlestick chart to monitor the John Deere (DE) stock chart breakout. This is a long-term breakout since this is being analyzed on a monthly candlestick chart.

The first upper price target was the $120 – $124 price range. This price range was calculated by adding the width of the trading channel to the top of trading range. The trading channel had a $25 width. Add the $25 to the top of the trading range and come up with an approximate $120 price target. That price target using that method has been met. It’s time to calculate additional upside price targets, if they still apply.

One price target range that I calculated is the[s2If !current_user_can(access_s2member_level1)]……

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I look at upside target prices, both short and long-term, for John Deere’s (DE) share price.

If you are not a Trendy Stock Charts member, consider joining today! There are several different subscription plans available.[/s2If][s2If current_user_can(access_s2member_level1)] $145 – $153 price range.

New Price Target Range

These new price range was calculated using the black Fibonacci Extension Tool’s 423.6% Target Line which has a price of $153.14. That is the upper end of the new price range.

Prior chart history was also used to estimate the current uptrend. For prior chart history, I replicated the angle & length of a previous uptrend from March 2009 through April 2011. I placed a trendline on the uptrend and then duplicated the trendline using. Duplicating a line makes it easier to keep the same angle and length for the trendline.

I placed the duplicated trendline at the beginning of its recent uptrend. That previous uptrend was approximately $75 in length overall. The end of the trendline provides for an approximate $145 price target.

With a MACD Histogram that still shows long-term buying momentum that is increasing, chances of reaching the $145 – $153 price range look very good.

DE – Medium-Term Price Objectives

This next chart is a 2 year weekly candlestick chart to analyze the John Deere (DE) stock chart breakout from my favorite point of view, a weekly candlestick view. Weekly candlestick charts filter out some of the noise of a daily chart while also providing a longer-term perspective than a daily chart and not so long like a monthly candlestick chart. Therefore, weekly candlestick charts are probably my most preferred view.

This 2 year weekly candlestick chart has a Fibonacci Extension Tool placed on it to calculate some potential shorter-term upside price targets. The 100% Target Line from this calculation seems to corroborate the $145 price level also calculated above on the monthly chart.

The MACD Histogram on the weekly chart also shows increased buying momentum, but that momentum could be waning and offer a trading opportunity for those current shareholders of DE.

Trading Strategies

For current shareholders of John Deere (DE), consider selling some shares above the $130 level and look to re-purchase those shares on a pullback that should follow shortly after. The repurchase area would be the $120 – $125 range. Only consider this trade and sale if the MACD Histogram on the weekly chart starts to slow down and show a decrease in buying momentum. The decrease in buying momentum just may allow DE’s share price to pullback to its supporting trendline, also around the $115 – $120 area, depending upon when the pullback develops in earnest.

If you do not currently own shares but are interested in building a position in John Deere’s stock, monitor its share price. Consider any pullback to the $120 level or below as an excellent opportunity to make a 1/3 scale-in purchase of shares. That means, purchase 1/3 of the money that you want in total to invest in John Deere (DE).

DE – P&F Chart

This next chart is a P&F Chart to see what sort of price objectives that this form of analysis provides. Both P&F Chart views, intra-day and closing, provide for the same bullish price objective of $106 which has been met.

The P&F Charts do not appear to provide any additional insight as to the probability of reaching some of the higher price targets I’ve calculated.

DE – Moving Averages

Considering that the analysis of the P&F Chart review provided no insight, I will look at one more chart. This last chart is a 1 year daily candlestick chart to analyze the John Deere (DE) stock chart breakout from an even shorter-term perspective.

I have moving averages overlaid on the chart and also placed a Fibonacci Extension Tool at the beginning of a potential Bullish Impulse wave pattern to see some short-term price objectives.

The Fibonacci Extension Tool suggests a short-term price target of $132.15; that could be an area of profit taking and part of my trading strategy mentioned above for those currently holding shares of DE.

For those wanting to wait for a pullback to ensue, use the next pullback to the 20 Day moving average (purple line) as a scale-in entry point. It has to be the next pullback though. It is typically safe to purchase the first and second pullbacks to the 20 Day moving average in an uptrend. Purchasing shares on the 3rd or subsequent pullbacks take on greater risk to the downside.

John Deere (DE) Stock Chart Breakout Summary

The John Deere (DE) stock chart breakout appears to continuing as anticipated. New upside price targets have been calculated due to the strong breakout performance of DE’s share price.

The next pullback towards DE’s supporting trendline is an excellent opportunity to jump in on its uptrend. A scale-in purchase at current levels could start a position in the stock. That would then be followed by another scale-in purchase if the pullback to the $115 – $120 range does develop. That is one way to begin building a position in the company.

John Deere (DE) has upside price targets of $145 – $153 that appear very probable. Its share price also has the possibility of reaching the $164 price area in a few months.

I’ve described a few different ways to scale-into shares above. Let me know if you have any questions or need additional guidance. You can email me at limit5bass@icloud.com if you don’t feel comfortable posting your question below or in the Idea Chamber.

Good luck trading!

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