Deere & Co ($DE) has trended higher for about 16 straight points, most recently rallying from $74 to $90. However, more movement could be seen from this stock ahead, as important two-day relationships have formed that indicate a major breakout could be on the horizon. Here’s why..
Inside Day Formation
The daily chart shows $DE has formed a clear Inside Day relationship, which occurs when the prior day’s price range falls completely inside the price range of the preceding bar. This two-day relationship can usually lead to a major breakout opportunity, especially if price opens with a gap outside the recent price range.
Watch for a breakout from $88.75 or $90.00, as a breakout in either direction could spark a one- to three-day move in the direction of the break. Look for swing targets at either $94.50 or $85, depending on direction.
Inside Value Relationship
The 15-minute chart shows today’s value area is will be inside the value area from Friday’s market. This is what I call an Inside Value relationship, and has the same qualities as the Inside Day candlestick formation.
This relationship indicates that price/value is clearly coiling up within a tighter and tighter range and will eventually see a breakout opportunity – likely today. A breakout from range/value could spark a very nice trending opportunity for today’s session. Short term targets could be seen at either $87 or $92.
Watch $90 and $88.75 very closely for entry opportunities.
Let’s see how this stock plays out!
Cheers!
Frank Ochoa
PivotBoss.com
Follow Frank on Twitter: http://twitter.com/PivotBoss