PreMarket Prep Stock Of The Day: Deere

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

Ahead of the Thanksgiving holiday, the earnings calendar was light. One major issue, John Deere & Co. DE, did announce earnings and is the PreMarket Prep Stock Of The Day.

Flirting With All-Time High: Just over two weeks ago, on what turned out to be one of three huge “Monday vaccine rallies,” Deere made a new all-time high at $265.87 but retreated to end the session at $248.67.

Over the next four sessions, it put in a series of lows ranging from $245.96 to $249.49 and embarked on a pre-earnings rally. On Tuesday, it came up shy of its all-time high but did post a new all-time closing high at $261.51.

Before today's open, the company announced a huge third-quarter EPS beat of 90 cents and a sales beat just shy of $1 billion. The company attributed the impressive numbers to the major improvement in equipment demand in the quarter. Deere forecasts 2021 net income in the $3.6-$4 billion range.

Nothing But Buyers, Then Sellers: As expected in this market environment, buyers swarmed the issue by taking it all the way to $270 just after 9 a.m. ET. However, it wasn't able to hold that elevated and only managed to open at $263.01 before mounting another rally.

Double Top: As the true liquidity came into the issue, the rally was abruptly halted at its exact all-time high ($265.87) and sharply reversed course. As of 1:45 p.m. ET, the issue has given back all of those gains and is now deep in the red by $5.50 at $256.01.


Can’t Say We Didn't Warn You: When the issue was being discussed on the show, it was trading at just under $270. Co-host Dennis Dick noted its peer Caterpillar CAT wasn't making a sympathy move: "In fact, it justs looks like it's sitting here collecting dust."

The author of this article was skeptical the issue would be able to sustain all of the premarket gains. As always, the emphasis was put on taking out the premarket high and continuing higher early in the session.

The full discussion on the issue from today’s show can be found here:

Posted In: EarningsNewsTechnicalsTrading Ideas