Top Trade Ideas - Week Of December 9: Deere

Here is your Bonus Idea with links to the full Top Ten:

Deere, Ticker: DE

Deere, (DE), broke above a 6 month channel on Friday and above the 200 day Simple Moving Average (SMA). Wednesday was the first time since June it had closed above it. It also has Bollinger bands that are expanding to the upside with a bullish Relative Strength Index (RSI) and a MACD that is rising. All three support continued upward price action. The next test of resistance may be found at 88.75 with 90 above that and a gap to fill to 92.29. before the previous double top is retested at 94. Support lower comes at 84.50 and 83.60 followed by 82.50 and 81.40.

Trade Idea 1: Buy the stock now (over 85) against a stop at 85.

Trade Idea 2: Buy the December 13 Expiry 85 Calls (offered at 95 cents late Friday) as long as the stock is over 85.

Trade Idea 3: Buy the December monthly 85 Calls ($1.34) with the stock over 85.

Trade Idea 4: Buy the December/January 87.5 Call Calendar (56 cents). The December 87.5 Call has very large relative Open Interest.

Trade Idea 5: Buy the January 85/December 87.5 Call Diagonal ($1.60). At December expiry look at selling the January 87.5 or 90 Calls to recoup more premium.

After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which, heading into the next week, sees the equity markets look positive but extended on the longer timeframes. Look for Gold to continue lower or consolidate while Crude Oil remains biased higher. The US Dollar Index looks to resume the downward path along with US Treasuries, especially if they break support are biased lower. The Shanghai Composite looks strong while Emerging Markets carry a neutral bias for the week. Volatility looks to remain subdued keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, with a move lower looking for new all-time highs in the indexes again. The index ETF’s remain biased higher but with caution. The QQQ is the most extended on the weekly time frame with the SPY next and the IWM the least worrisome. Use this information as you prepare for the coming week and trad’em well.

Disclaimer: The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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