I will never discount Warren Buffett.
The man is filthy stinking rich. I’ll never see .0005% of what he’s earned.
He and I are different traders, though.
He’s strictly a fundamental investor seeking intrinsic value being ignored by the rest of Wall Street. He’s not looking for what the stock may do five days from now – as we do. He’s looking at it with a 20-year view.
That’s why he bought Deere (DE) stock in recent weeks. He believes it’ll rocket much higher.
I do, too. But I don’t just look at it using fundamentals. I must also look at it technically.
When Buffett bought the stock, it was sitting at double top. It was also sitting at a historical resistance point that has now failed about eight times since January 2013.
Eight times!
I can’t ignore that. While Buffett’s fundamental reasoning is sound, any one that jumped in with him – ignoring the historical pivots – lost money.
The stock – in my opinion – will fall to prior support around $85.
I’ve already recommended exiting half of the DE June 90 put for gains. Today, I’m recommending that you exit the second half for gains of up to 36%.
I simply want to protect this gain, in case the market decides to put in another move higher on nothing again. I’m being protective as a “just in case.”
At the same time, let’s take a new small position in a new DE put. Consider buying to open the DE June 85 put up to $2.75.
Ian L. Cooper
Inside Value Trader