NEW BULLISH Plays
Automatic Data Processing - ADP - close: 46.85 change: +0.25
Stop Loss: 45.95
Target(s): 49.75, 52.50
Current Option Gain/Loss: unopened
Time Frame: 10 to 12 weeks
New Positions: Yes, see trigger
Why We Like It:
The last three month for ADP have been impressive. Shares have powered through multiple layers of resistance. In the past three weeks ADP broke through key resistance at $46.00 to hit new three-year highs. Now shares look ready to breakout again after a two-week consolidation under the $47.00 level. The high on December 7th was $47.17. I am suggesting a trigger to open bullish positions at $47.25. If triggered we'll use a stop loss at $45.95. Our first target is $49.75. While the trend is up ADP doesn't move super fast so this could take several weeks.
FYI: The Point & Figure chart for ADP is forecasting a bullish price target of $66.00.
Buy-the-breakout Trigger @ $47.25
Suggested Position: Buy ADP stock @ $47.25
- or -
Buy the 2011 February $50.00 call (ADP1119B50)
*Note: just because the Feb. $50 calls are cheap don't go overboard and buy too many. They're cheap for a reason. ADP may not hit $50 by Feb. expiration.
Entry on December xx at $xx.xx
Earnings Date 01/26/11 (unconfirmed)
Average Daily Volume: 2.8 million
Listed on December 16th, 2010