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

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.