ADP closes within previous day's range
Automatic Data Processing Inc. (ADP) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
ADP ended the week 0.01% higher at 134.87 after gaining $1.55 (1.16%) today, outperforming the Nasdaq 100 (0.38%) ahead of tomorrow's Memorial Day market holiday. Closing within the previous day's range, prices missed to decisively move beyond the prior day's trading range.
Daily Candlestick Chart (ADP as at May 22, 2020):
Friday's trading range has been $3.77 (2.83%), that's slightly below the last trading month's daily average range of $4.03. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for ADP. Prices continued to consolidate within a tight trading range between 131.95 and 137.62 where it has been caught now for the whole last trading week.
In a volatile session, prices traded above the previous day's high as well as below the prior day's low, forming a bullish Outside Bar. In spite of a weak opening Automatic Data managed to close above the previous day's open and close, forming a bullish Engulfing Candle.
After spiking up to 135.72 during the day, the market found resistance at the 50-day moving average at 135.66. The last time this happened on Monday, ADP lost -2.42% on the following trading day.
The stock shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
Buying could speed up should prices move above the close-by swing high at 137.62 where further buy stops might get triggered. Further selling could move prices lower should the market test April's nearby low at 126.69.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the OHLC Patterns based market condition "Close to Swing High" stand out. Although it is usually interpreted as neutral, it has actually shown to be bullish for Automatic Data. Out of 811 times, ADP closed higher 53.76% 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 60.91% with an average market move of 0.61%.