January 22 Chart of the Day - Archer-Daniels-Midland
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Archer-Daniels-Midland (ADM) stock price is plunging today as the company placed its CFO on administrative leave and cut its earning outlook in the midst of an investigation into its accounting practices.
Investors seem panicked as price has dropped 22% today trading below $53 and well off its $98.88 all time high (ATH) set in April of 2022.
From a price action technical analysis perspective we can see on the monthly chart that this drop could simply end up being a "normal" bull Fibonacci pull back retracement regardless of how sudden it came.
Down on the weekly chart we can see how priced gapped down on today's open and is testing what had previously been a long time ATH...
Additionally, price is revisiting an area that seemingly is or may become a change control zone.
Change control zones are one of the five price action tools we teach when charting anything. By definition, they are an area that represents where neither the bulls nor bears are in charge. Price can slash though the zone with seemingly reckless abandon, price can respect the top or bottom from outside it or within it. Or, price can trade aimlessly sideways within it. When price breaks away from the zone it can often get drawn back to it like a magnet. And in this case we see all of the above are true.
This could be a level for the bulls to step in but as we all know there's never any guarantees in the markets other than price continuously cycles up and cycles down across all time frames.
So what's next?
We don't make predictions...
Nobody knows for sure but using these 5 price action tools traders and investors can develop levels of interest in both directions.
- Support/Resistance
- Trend
- Fibonacci
- Supply/Demand Zones,
- Change Control Zones
Take a look at the charts and let us know what you think.
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