Buy Alert: April 1, 2013

Buy Alert:  April 1, 2013

 

Trade Details

Buy Deere & Company (DE) May 2013 $87.50 Calls for $1.50 or better

 

Why?

Although it’s April Fool’s Day, this trade is no joke.  Deere has dropped on a weaker US agriculture market outlook – not to mention a significant selloff in grain prices over the last couple trading days.  However, DE is too good of a company to ignore.  And, I don’t see demand for farm equipment slowing any time soon.

Both the fundamentals and technicals point to a quick recover for the agricultural equipment giant.  In particular, the stock has fallen below its 20-day and 50-day moving average, but has strong support below at the 200-day moving average (see chart below).

I don’t see the stock falling below the 200-day moving average.  In fact, I expect it could bounce back very quickly.  Let’s grab May calls in DE.

 

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Category: OTW Buy Alerts