Automatic Data Processing Inc. (ADP) recently broke out on the upside of a nine-month consolidation pattern. This new uptrend is just beginning, in my opinion, so traders and investors have a good trade location to go long now.
Let's review the charts and indicators to give you a clear strategy for the weeks ahead.
In the daily bar chart of ADP, below, we can see that prices traded sideways between the $155 and the $175 area before the recent breakout to new highs. Prices tested the rising 200-day moving average line in October and November and that turned out to be a buying opportunity. ADP is now above (but not extended) the rising 50-day moving average line and the rising 200-day moving average line.
The trading volume looks like it has increased since August and the On-Balance-Volume (OBV) line looks like it has firmed since September. The Moving Average Convergence Divergence (MACD) oscillator has turned up above the zero line in early November.