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Bulls Beware as Deere Reports Earnings


The stock sold off six out of seven quarters during earnings publication, and there is limited upside potential.

Before tomorrow's open, Deere & Company (NYSE:DE) will report its earnings for Q4 2012, and the consensus estimates is $1.41 EPS on $6.72 billion in revenue.

Deere has been going up since September 2012, and in contrast with the overall market, DE had a healthy correction at the beginning of February. Since this morning the stock has been flat in anticipation of earnings. There is reasonable support at $92.60. The MACD indicated the correction would come at the beginning of February. Now it looks as though the same MACD is willing to go back and cross that signal again to go into positive territory. The RSI is getting flat at the 60 level, which still leaves some room for the upside if earnings are good. Earnings disappointed the last two quarters in October and July, but if it hits the $1.41 consensus, it should rise roughly 9% in comparison with EPS in the same quarter last year. The overall expectations on DE are a buy to strong performance into earnings, but be wary that the stock sold off six out of seven quarters during earnings publication, and with a 52-week high of 95.60, there is a limited upside potential.

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