Driving east or west along Interstate 70 in Kansas, you don't have to slow down from 75+ mph to see the signs driven into the ground giving you notice that an Archer-Daniels-Midland (ADM) product is in use. You can also buy weathered ADM signs in any number of antiques stores throughout the Sunflower State. Let's check on what the chart of ADM looks like.
In this daily chart of ADM, above, we can see four small "waves" or cycles up from the January low. There is a golden cross of the 50-day and 200-day moving averages in June. Prices are above the rising 50-day average line and the flat 200-day line. The daily On-Balance-Volume (OBV) line has been rising since the January low and is a real supporting plus for the advance. There are no bearish divergences between the price action and the momentum study to derail the advance at this time.
In this three-year weekly chart of ADM, above, we can see prices are above the 40-week moving average line but the line is flat. The weekly OBV line is steady on this time frame but a rising OBV would be preferred. The Moving Average Convergence Divergence (MACD) oscillator is in a very bullish configuration -- rising strongly above the zero line.
Traders could go long ADM on a close above $44.50 accompanied by a pickup in volume. A decline below $40 would turn the chart to the downside.
Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.
The grocery and drug retailer is still in an uptrend, but this technical analyst doesn't like the bearish divergences and a shrinking volume pattern.
Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation.
If you have questions, please contact us here.
Email
Email sent
Thank you, your email to has been sent successfully.
