After the big run, I'm still being cautious looking for bullish names. Since we are seeing some rotation, the agriculture sector is interesting here, as money may be looking for reversals and prior beaten-down names.
Archer-Daniels-Midland (ADM) is following up strong technicals with bullish price action today. The moving average convergence divergence (MACD) saw a bullish crossover just a day ago.
This, along with the Commodity Channel Index (CCI) pushing over 100, may be signaling a change in trend on ADM.
The Relative Strength Index (RSI) has pushed over 50, so it is bullish, although it isn't a strong momentum read yet.
The same can be said for the volume action as indicated by the Force Index. We have the 50-day simple moving average (SMA) acting as resistance today, and I would wait for a close above that level before looking long.
A pullback to the mid-$43 area with no intraday moves below the 10-day SMA would be a positive development. After the big move off $41, this small consolidation should increase the chances of a move to $48 on a close over the 50-day SMA.
But I prefer Bunge (BG) in this space. The stock is already above its 10-day and 50-day SMA, with the 10-day set to close over the 50-day tomorrow at this pace.
The RSI and Force Index are stronger here, showing strength in the momentum, while the longer-term MACD and Ultimate Index are already signaling a reversal in trend.
There's a big gap in the low $80s just waiting to be filled here. Bulls have support just below $75 and then again at $73. This makes for an attractive defined risk play.
Going with something basic, like a call or call spread like a November $72.50-$80, would be in my wheelhouse. I would also consider January $72.50 calls alone if I wanted to play a longer-term reversal and I felt like $85 was achievable.
I prefer the November spread here. The bid-ask is a bit wide though, so one alternatively is long the stock and long November $72.50 puts, along with maybe selling a covered call.
I'll try and take a shot on the call spread, but it will likely take some time to fill around $3.60 or less. If no luck there, then I'll look at a synthetic call (long stock, long put) later this afternoon.