Agriculture stocks are breaking out. Jay Woods says watch these levels
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Welcome to September! A time where markets tend to stumble. With that backdrop, it's time to revisit an old idea and two stocks within a sector giving us actionable trade ideas now. Back in February, I wrote : "Keep this idea on the back burner because any pullback should be seen as an opportunity to add exposure to this part of the materials sector." Nearly seven months later, the VanEck Agribusiness ETF (MOO) is simmering. After gaining nearly 20% in six weeks to start the year, MOO spent months digesting that move and building a base. Now it's breaking out again. On the daily chart, MOO has formed an imperfect but recognizable inverse head-and-shoulders pattern and decisively broken through resistance around $86-$87. The roughly 10-point distance from the $86 neckline to the $76 head gives us a measured target near $96. Watch the old ceiling around $86. Former resistance should become support, while a decisive move back below the $85 level would question the breakout. MACD has crossed higher near zero and moved positive. RSI near 78 is overbought but that does not automatically mean the move is over. Strong trends can stay extended. Examining the five-year weekly chart, we see shares peaking above $100 in 2022 before retreating and spending several years forming a broad rounded bottom. Price is now above both major weekly moving averages. The 50-week has crossed above the 200-week forming a golden cross, and the latest pullback found support near their convergence. Weekly MACD has crossed higher near zero. Prior peaks around $96 line up with our daily target, followed by $100 and the old 2022 high near $109. With agriculture back in focus for consumers and Washington alike, this is an area worth watching during a historically difficult month. Yet when it comes to sector ETF's, I like to look under the hood to see what's really moving the sector. That brings us to two specific components of the ETF — Deere (DE) , which makes up 8.25% of the ETF and CF Industries (CF) , which is 4.8%. Deere (DE) Let's take aim at Deere first and target the one-year daily chart. The stock has spent the last six months carving out a broad rounded bottom with some resemblance to an inverse head-and-shoulders pattern. Call it what you want. The level that matters is clear. The $660-$670 area repeatedly capped the stock, and Deere has now broken decisively through it. Using roughly $675 as the neckline and the May trough near $515 gives us about 160 points of depth and a measured target around $830. On any decline, the old $660-$670 ceiling should become support. Use this level to manage downside risk. As for momentum, MACD is positive and turning higher, while RSI near 70 remains strong and isn't meaningfully stretched. The weekly chart shows why Deere has been one of the cleaner stocks to monitor. Its trend has developed almost like a staircase: breakout, consolidation, support, then another step higher. This week's candle is breaking through another major shelf. If $660-$670 becomes the next floor, $830 is a reasonable longer-term objective. CF Industries (CF) CF is the world's largest producer of ammonia and a leading manufacturer of nitrogen-based fertilizers, including urea and urea ammonium nitrate. It's a leading product that helps farmers increase crop yields. Fundamentally, this Philadelphia native and New York City transplant is not going to pretend I am an expert on what they do. What I do know is the chart looks quite appetizing. CF has carved out the cleanest inverse head-and-shoulders pattern in the group as seen in the daily chart above. The neckline sits around $130-$133, and yesterday's move pushed decisively through that ceiling and into the prior highs above it. Using a $133 neckline and a head near $100 gives us roughly 33 points of depth, putting the measured target near $160. The first test is simple: can former resistance become support? MACD is turning positive, while RSI in the low 70's confirms strong momentum. CF spent years in a broad base before breaking out in 2025. It rallied and then consolidated into the current pattern. Price is above its rising 50 and 200-week moving averages, the weekly MACD has crossed higher. This is not a stock trying to bottom from a long-term downtrend. It has already broken out, digested those gains and is poised for another leg higher. If CF holds its breakout zone, $160 remains a reasonable longer-term objective. The trade Both stocks look ready to continue higher. Buy these breakouts and use stops just below recent levels from where they broke out to limit losses if they reverse. Upside targets have been established, and the trends are now in your favor. These are some of the cleaner setups we can find right now and could reap profits for investors over the coming weeks. Jay Woods, CMT with Chase Games DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.