Automatic Data Processing (ADP) looks much weaker to me, based on the charts of the cloud-based human resources and payroll company.
In the daily bar chart of ADP, below, I can see a bearish picture. ADP is trading below the declining 50-day moving average line and below the flat 200-day moving average line. The trading volume has increased in recent months, telling me that traders are voting with their feet.
The On-Balance-Volume (OBV) line has been in a decline from early December, telling us that sellers of ADP have been more aggressive than buyers. The trend-following Moving Average Convergence Divergence (MACD) oscillator is bearish but shows improvement since February.
In this weekly Japanese candlestick chart of ADP, below, I can see that ADP broke its longer-term uptrend. Prices now trade in a downtrend below the cresting 40-week moving average line. The weekly OBV line has moved sideways to lower since April 2022. The MACD oscillator is bearish. The recent candles show us some lower shadows, but this may not be enough to stop the downward path in prices.
In this daily Point and Figure chart of ADP, below, I can see the software is projecting a potential downside price target in the $189 area.
In this weekly Point and Figure chart of ADP, below, I see a lower price target in the $177 area.
Bottom line strategy: I believe the U.S. economy is slowing, so it is easy to imagine the ADP's business will take a hit and its stock price could decline. Avoid the long side of ADP for now.
