Archer Daniels Midland (ADM)

A developing head and shoulder bottom for ADM

ADM is building a potential early 2024 into late 2025 (maybe early 2026) head and shoulders (H&S) bottom. Holding the rising 26- and 40-week moving averages (WMAs) from 57.26 to 53.81 could carve out the right shoulder, but even if ADM declined into the zone of the left shoulder lows a 52.28-50.72, the stock would still be within this potentially bullish pattern.

If the right shoulder successfully forms, we will look for a breakout above the H&S neckline near 65.00-66.08 to confirm the bottom and favor upside beyond the falling 200-WMA near 69.20 toward the pattern count at 89.00. This target aligns with the mid 2023 peak at 87.30.

Chart 1: Archer Daniels Midland (ADM): Weekly candlestick chart

Using Fibonacci retracements as a guide

Holding the zone between the 38.2% and 61.8% retracements of the April to October rally would support the case for the right shoulder of the H&S bottom. These retracement levels are 55.82 (38.2%), 52.99 (50%), and 51.15 (61.8%).

The retracements for the April 2022 to April 2025 decline look significant as well. The 38.2% retracement near 63.10 converges with the H&S neckline near 65-66. The 50% and 61.8% retracements offer interim price targets at 69.93 and 76.76, respectively, and converge with chart resistances.

Chart 2: Archer Daniels Midland (ADM): Weekly with retracement levels