Thursday, January 19, 2012

"Bulls Begin to Climb Aboard Deere" (DE; MOO)

By the time the commentators spot the trend...
The stock is up another 72 cents at $86.94.
From Schaeffer's Research:

DE's positive price action may result in a shift in sentiment
Early this morning, brokerage firm Baird made a slew of price-target adjustments, cutting some and raising others. Construction concern Deere & Company (DE - 86.27) found itself on the receiving end of one of the broker's bullish notes, as Baird raised its price target on DE by $3 to $90.
Despite a seemingly bullish nod, this new price target represents a slim 4% premium to yesterday's close of $86.22 -- echoing withstanding bearish sentiment held toward the stock. In fact, the average 12-month price target of $90.53, as calculated by Thomson Reuters, is only a 5% premium to Wednesday's close.
This pessimistic skew is continued in the options pits, as evidenced by DE's Schaeffer's put/call open interest ratio (SOIR) of 1.11. This ratio ranks just six percentage points from a 52-week peak, indicating that near-term traders have rarely been more bearishly aligned toward the stock.
In addition, the security's 50-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) put/call volume ratio of 0.82 ranks higher than 94% of other such readings taken in the past year -- showing that puts have been bought to open over calls at a near annual-high clip in recent months.
Wall Street is little moved by Baird's upwardly revised target today, with the stock up fractionally at last check. Overall, DE has had a nice run on the charts in the first few weeks of 2012, adding 11.5%. Furthermore, over the course of the past 20 trading sessions, DE has outperformed the broader S&P 500 Index (SPX) by more than eight percentage points, on a relative-strength basis. It's no surprise, then, that during this same time period, the equity has been ushered higher by its ascending 10-day moving average.
Price Chart of de

In light of DE's upward trajectory, sentiment toward the stock may be shifting. Calls were certainly the options of choice in yesterday's session, where roughly 13,000 contracts crossed the tape, compared to fewer than 8,650 puts...