Automated Data Signal 04/09: Support Levels Hold? (Chart)

(MENAFN- Daily Forex) Long Trade Idea

Enter your long position between $294.59 (the lower band of its horizontal resistance zone) and $300.07 (yesterday's intra-day high).Market Index Analysis

• Automated Data Processing (ADP) is a member of the NASDAQ 100 and the S&P 500.
• Both indices try to hold on near record highs, but downside risks continue to rise.
• The Bull Bear Power Indicator of the NASDAQ 100 shows a negative divergence.

Market Sentiment Analysis

Yesterday's JOLTS report from the Bureau of Labor Statistics showed that more Americans are out of work than there are available job openings. For the first time since April 2021, the ratio of job vacancies to unemployed workers decreased below 100. The latest reading of 0.99 compares to 0.96 in April 2021. President Trump also suggested his administration might have to unwind trade deals if it loses the court case against his tariffs. Amid the uncertainty and cooling labor market, traders price in a September interest rate cut with nearly 100% assurance. Friday's NFP report can make or break that case Data Processing Fundamental Analysis

Automated Data Processing is a human resources and management firm with an expanding global footprint. It is best known for its ADP employment report in the US that precedes the official NFP report by two days.

So, why am I bullish on ADP after it reversed its previous breakout?

ADP just announced its latest AI features, and I think they will have an immediate impact on its next earnings release. ADP processes one in six US paychecks, and its cloud-based solutions form the backbone of many companies. I also appreciate its unique position to invest in smaller, global human resources firms, as they boost strategic position. The free cash flow generation should support its expansion plans, and the dividend yield is a nice bonus Data Processing Fundamental Analysis Snapshot

The price-to-earning (P/E) ratio of 29.95 indicates ADP is an inexpensive stock. By comparison, the P/E ratio for the NASDAQ 100 is 33.61.

The average analyst price target for ADP is $320.25, which suggests reasonable upside potential with manageable downside risks Data Processing Technical Analysis

Automated Data Processing Price Chart

• The ADP D1 chart shows a price action inside its horizontal support zone.
• It also shows price action between its descending 0.0% and 38.2% Fibonacci Retracement Fan levels.
• The Bull Bear Power Indicator is bearish, but at its ascending trendline.
• The average bullish trading volumes are higher than the average bearish trading volumes.
• ADP trended sideways as the S&P 500 inched higher, a bearish trading signal, but bullish factors continue to accelerate.

Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money My Call on Automated Data Processing

I am taking a long position in ADP between $294.59 and $300.07. Valuations are reasonable, and I like the implementation of AI across its human resource cloud platform. Short-term selling pressures have decreased, and a pending technical breakout could spark more upside.

• ADP Entry Level: Between $294.59 and $300.07
• ADP Take Profit: Between $329.93 and $346.52
• ADP Stop Loss: Between $280.34 and $288.34
• Risk/Reward Ratio: 2.48

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