Archer Daniels Midland is setting up nicely for a breakout.

A possible breakout setup was detected on Archer Daniels Midland (NYSE:ADM) by our stockscreener. A breakout pattern is formed when a stock consolidates after a strong rise up. We note that this pattern is detected purely based on technical analysis and whether the breakout actually materializes remains to be seen. It could be interesting to keep an eye on NYSE:ADM.

Zooming in on the technicals.

Every day ChartMill assigns a Technical Rating to every stock. The score ranges from 0 to 10 and is determined by evaluating multiple technical indicators and properties.

We assign a technical rating of 10 out of 10 to ADM. This is due to a consistent performance in both the short and longer term time frames. Also compared to the overall market, ADM is showing a nice and steady performance.

• Both the short term and long term trends are positive. This is a very positive sign.
• When comparing the yearly performance of all stocks, we notice that ADM is one of the better performing stocks in the market, outperforming 75% of all stocks. We also observe that the gains produced by ADM over the past year are nicely spread over this period.
• ADM is one of the better performing stocks in the Food Products industry, it outperforms 86% of 92 stocks in the same industry.
• ADM is currently trading in the upper part of its 52 week range. The S&P500 Index however is currently trading near a new high, so ADM is lagging the market slightly.
• In the last month ADM has a been trading in the 62.58 - 66.98 range, which is quite wide. It is currently trading near the high of this range.

Looking at the Setup

Besides the Technical Rating, ChartMill also assign a Setup Rating to every stock. This setup score also ranges from 0 to 10 and determines to which extend the stock is consolidating. This is achieved by evaluating multiple short term technical indicators. NYSE:ADM currently has a 9 as setup rating:

ADM has an excellent technical rating and also presents a decent setup pattern. Prices have been consolidating lately and the volatility has been reduced. There is a resistance zone just above the current price starting at 67.66. Right above this resistance zone may be a good entry point. There is a support zone below the current price at 66.25, a stop order could be placed below this zone. Very recently a Pocket Pivot signal was observed. This is another positive sign.

Trading setups like NYSE:ADM

One way to play this would be to wait for the actual breakout to happen and buy when the stock breaks out above the current consolidation zone. A possible place for a stop loss would be below this zone.

Of course, there are many ways to trade or not trade NYSE:ADM and this article should in no way be interpreted as trading advice. The article is purely based on an automated technical analysis and just points out the technical observations. Always make your own analysis and trade at your own responsibility.

Every day, new breakout setups can be found on ChartMill in our Breakout analyzer.