Long Trade Idea
Enter your long position between $256.83 (the upper band of its horizontal support zone) and $260.66 (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 trade inside bearish chart patterns with rising bearish volumes.
- The Bull Bear Power Indicator of the NASDAQ 100 is bullish with a descending trendline.
Market Sentiment Analysis
Equity markets extended their year-end slide with rising bearish trading volumes, and equity futures are pointing to another sell-off this morning. Minutes from the last FOMC meeting revealed a tight decision to cut interest rates, while the Dot Plot Chart shows just one interest rate cut in 2026 and one in 2027. Tesla issued a downbeat outlook, while warnings about the circular financing trap in AI, led by NVIDIA, added to bearish sentiment. Today’s session is likely to extend this week’s downtrend amid a lack of catalysts in either direction.
Automated 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, which precedes the official NFP report by 2 days.
So, why am I bullish on ADP at current levels?
While ADP received a ratings downgrade amid structural headwinds and a price target cut, I remain bullish on its expanding profit margins, industry-leading operating margins, and scale, which should help it gain market share globally amid a challenging 2026. ADP has delivered solid revenue growth, has a history of upside earnings surprises, maintains a stable dividend yield, and shares trade at cheap valuations.
Metric | Value | Verdict |
P/E Ratio | 25.65 | Bullish |
P/B Ratio | 16.47 | Bearish |
PEG Ratio | 3.10 | Bearish |
Current Ratio | 1.05 | Bearish |
ROIC-WACC Ratio | Positive | Bullish |
The price-to-earnings (P/E) ratio of 25.65 indicates ADP is an inexpensive stock. By comparison, the P/E ratio for the NASDAQ 100 is 34.57.
Top Regulated Brokers
The average analyst price target for ADP is $289.54, suggesting reasonable upside potential with acceptable downside risks.
Automated Data Processing Technical Analysis
Today’s ADP Signal
- The ADP D1 chart shows price action breaking out above its horizontal support zone.
- It also shows price action breaking out above its descending 38.2% Fibonacci Retracement Fan level.
- The Bull Bear Power Indicator is bearish with an ascending trendline.
- The average bullish trading volume has increased.
- ADP outperformed the S&P 500 Index this week, a bullish confirmation.
My ADP Long Stock Trading Signal
- ADP Entry Level: Between $256.83 and $260.66
- ADP Take Profit: Between $293.73 and $304.00
- ADP Stop Loss: Between $240.22 and $244.65
- Risk/Reward Ratio: 2.22
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