ADM still stuck within tight trading range
Archer-Daniels-Midland Company (ADM) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
ADM finished the week 3.69% higher at 35.38 after gaining $0.26 (0.74%) today on low volume, slightly outperforming the S&P 500 (0.24%) ahead of tomorrow's Memorial Day market holiday. Trading up to $0.24 lower after the open, the share managed to reverse during the session as bulls took control ending the day above its opening price. Closing above Thursday's high at 35.32, the market confirmed its breakout through the previous session high after trading up to $0.09 above it intraday.
Daily Candlestick Chart (ADM as at May 22, 2020):
Friday's trading range has been $0.60 (1.71%), that's below the last trading month's daily average range of $0.96. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for ADM. Prices continued to consolidate within a tight trading range between 34.76 and 35.99 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. The last time this happened on March 13th, ADM actually lost -5.66% on the following trading day. Additionally, three candlestick patterns are matching today's price action, the Bullish Short Candle and the White Candle which are both known as bullish patterns and one bearish pattern, the Last Engulfing Top Pattern.
After trading down to 34.81 earlier during the day, the stock bounced off the key technical support level at 35.00 (S1). The failure to close below the support could increase that levels importance as support going forward. Archer-Daniels-Midland was sold again around 35.41 after having seen highs at 35.32, 35.45 and 35.44 in the last three trading sessions. Obviously there is something going on at that level.
ADM shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying might accelerate should prices move above the nearby swing high at 35.45 where further buy stops could get triggered. Selling might speed up should prices move below the close-by swing low at 34.76 where further sell stops could get activated. As prices are trading close to May's high at 36.93, upside momentum might accelerate should the share mark new highs for the month.
Among the 15 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "High close to prior three Highs" stand out. Although it is usually interpreted as bearish, it has actually shown to be bullish for Archer-Daniels-Midland. Out of 29 times, ADM closed higher 55.17% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 58.62% with an average market move of 0.78%.