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Does Deere’s ‘Golden Cross’ Signal Downside?

The “Fast Money” pros sounded upbeat on Deere stock after better-than-expected earnings, but does its “golden cross” signal a decline ahead?

In its earnings call Wednesday, Deere reported a 4 percent rise in quarterly earnings and an 11 percent increase in sales. In its forecast, it also cited growing demand in every region except for Brazil, due to weather concerns.

Yet shares of Deere traded at $85.94 midday, down 3½ percent.

“We think the stock should be up on the news,” said JP Morgan analyst Ann Duignan, who said the company’s results would probably mean “upside pressure” on her price target of $100 per share.

“My hunch is we’re at mid-cycle to maybe a little bit later in North America, and we’re at very early stages of a secular trend in the rest of the world,” she said.

Trader Steve Grasso of Stuart Frankel said Deere, as well as Caterpillar, were worth a look.

“I do believe Deere is oversold at this level,” he said. “In both stocks, the 50-day has punched through the 200-day.”

Abigail Doolittle of Peak Theories Research said one element made this “golden cross” interesting, possibly signaling a “big decline” ahead.

“The 50-day rose above a sagging 200-day,” she said. “Ideally, you want to see both moving averages moving up at the same time.”

Brian Stutland of Stutland Equities said he was staying long on the stock but took some profits by selling $90 strike calls against his position.

The XLI ETF was another way to play industrials, he added.

“Just be leery,” he said. “They’ve had a nice run. Maybe look to take some profits here on some of these industrial names.”

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Trader disclosure: On Feb. 15, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Cortes is long Treasuries; Cortes is long SO; Cortes is long MO; Cortes is long DEO; Cortes is long RGR; Cortes is short EUR; Cortes is short CAD; Cortes is short Gold; Cortes is short Silver; Cortes is short XHB vs. S&P long; Cortes is short IYT vs. S&P long; Cortes is short BAC; Brown is long AAPL; Brown is long LULU; Najarian is long AAPL call spreads; Kilburg is long TLT

For Steve Grasso
Stuart Frankel & Co and it’s partners own CSCO

Stuart Frankel & Co and it’s partners own HPQ

Stuart Frankel & Co and it’s partners own MU

Stuart Frankel & Co and it’s partners own P

Stuart Frankel & Co and it’s partners own ZNGA

Grasso is long NUAN

Grasso is long S

Grasso is long XLU

For Abigail Doolittle
No disclosures

For Brian Stutland
AAPL bull option spread

BP long stock and short calls

DE long stock and short calls

EP short stock and short put and long calls as hedge

FXE long puts spread

GLD long call spread

INTC long stock and short calls

NAV long stock and short calls

SPY long put spreads

XLE long stock and short calls

MSFT long stock and short calls

MET long stock

Market maker holds hedged positions in VIX futures and options

For Scott Kesler
(SALESFORCE) I have no affiliation with any company I am speaking about in this interview.

I have no ownership interest in any company I am speaking about in this interview.

If S&P Capital IQ and/or one of its affiliates has performed services for and received compensation from the subject company during the past 12 months, then the equity analyst must disclose that fact for each subject company. The disclosure is on page 8 of the stock report above the "Disclaimers" section.

In addition to specific subject company disclosure, the following general disclosure should be made, "S&P Capital IQ and/or one of its affiliates may have performed services for and received compensation from the subject companies during the past 12 months."

For Ann Duignan
Lead or Co-manager: J.P. Morgan acted as lead or co-manager in a public offering of equity and/or debt securities for Deere & Co. within the past 12 months.

Director: A senior employee, executive officer or director of JPMorgan Chase & Co. and/or J.P. Morgan is a director and/or officer of Deere & Co..

Client: J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as clients: Deere & Co..

Client/Investment Banking: J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as investment banking clients: Deere & Co..

Client/Non-Investment Banking, Securities-Related: J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as clients, and the services provided were non-investment-banking, securities-related: Deere & Co..

Client/Non-Securities-Related: J.P. Morgan currently has, or had within the past 12 months, the following company(ies) as clients, and the services provided were non-securities-related: Deere & Co..

Investment Banking (past 12 months): J.P. Morgan received in the past 12 months compensation for investment banking Deere & Co..

Investment Banking (next 3 months): J.P. Morgan expects to receive, or intends to seek, compensation for investment banking services in the next three months from Deere & Co..

Non-Investment Banking Compensation: J.P. Morgan has received compensation in the past 12 months for products or services other than investment banking from Deere & Co..

For Nishu Sood
Deutsche Bank (and/or affiliates) owns 1% or more of any class of common equity securities of (DHI)

Deutsche Bank and/or its affiliate(s) has received non-investment banking related compensation from (DHI)

Deutsche Bank (and/or affiliates) own 1% or more of any class of common equity securities of (MDC)

Deutsche Bank (and/or affiliates) own 1% or more of any class of common equity securities of (PHM)

Deutsche Bank and/or its affiliate(s) has received non-investment banking related compensation from (PHM)

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