On Thursday, Deere and Co. (DE) pushed to new highs. But the equipment could not hold the breakout and rolled over swiftly falling hard today. Deere is sitting at a critical point on the chart. We can see the rising trend in the price action and this test of the previous high was an important one. After making it $0.03 above the previous high, the selling started. Deere gapped down this morning and looks to test the bottom trend line. If Deere holds and bounces it could be a great entry on the way to higher highs. If Deere fails to hold the trend line this will be considered a trend line failure and a double top failure. Watch the relative strength in purple at the top. If Deere breaks the horizontal line on the chart, I think we can expect more weakness. As long as it performs in line with the $SPX or better, there is a good chance of making and holding new highs.
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Greg Schnell, CMT