Agricultural and construction equipment giant Deere (DE) is a perfect example of that. Shares have churning sideways since the start of the year, trailing the S&P's performance by a somewhat sizable margin. But don't be fooled -- this stock could be a great momentum play this month.
The biggest factor is the rounding bottom that's been forming in shares since the start of June. That rounding bottom (which resembles the cup in MCD's price chart) indicates that sellers have slowly been overcome by buyers in the last month. More importantly, it provides us with a breakout price to watch for at the stock's $87 resistance level.
Shares are testing that resistance level today. I'd suggest becoming a buyer once we see a definitive break above $87 -- if shares open for trading materially above that price, it makes sense to go long. Consider a protective stop just below the 200-day moving average.Deere shows up a recent list of 7 Buy-Rated Dividend Stocks to Buy.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV