Swing Trade Idea (DE) – October 27, 2022
Our bearish trade for Thursday, October 27th is Deere & Company (DE). DE is part of the Industrial Sector, which has performed at 9.36% over the last month, with DE overperforming relative to its sector at 16.53% over the same period.
DE rallied into a key resistance area as it formed a double top at $390. As it is reaching a state of exhaustion, we believe that DE will respect this level. This is a counter-trend trade, which provides a good risk/reward bearish entry.
As a close, if DE were to trade above $390 for multiple days, this would invalidate our analysis and we would consider cutting losses on the trade. We also want to consider cutting losses on this options trade if the value of the vertical spread moves above $18.70.
