Pattern play: Archer-Daniels-Midland

Downside break out from a short-term symmetrical triangle pattern.

Commodities 8

Archer-Daniels-Midland (ADM), a global processor of agricultural commodities, broke out to the downside of a short-term symmetrical triangle pattern that began to form after price made its 2020 high of about 52.00 in late-October. The RSI has been holding around its neutrality area of 50. The simple moving averages (SMAs) are arranged in a bullish manner, with the 20-day SMA above the 50-day SMA and the 50-day SMA above the 200-day SMA. If the 20-day SMA crosses below the 50-day SMA, it would be a bearish signal. Interestingly, ADM's last peak was also at roughly 52.00 and occurred in October of 2018. Given the weak RSI reading and the downside pattern breakout, price will likely retreat towards the 47.90 support level. Price will likely break below 47.90 and dip to 45.90. If price manages to get under 45.90 then price could tumble further. On the other hand, if price can get above its 2020 high of 52.00 then price could aim to retest the all time high of 53.90. If price gets above 53.90, it could continue to run.         



Source: GAIN Capital, TradingView

More from Technical Analysis

Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.