Sell Archer-Daniels-Midland at $77 as the market goes on a losing streak

The Archer-Daniels-Midland Company (NYSE:ADM) has recorded the highest weekly loss of more than 8%. Currently, the share is trading at $77 and declining. Since the price is still among the highest in the company’s history, we recommend selling and taking a profit.

While capital market losses are expected for ADM, fundamental performance will remain strong. The earnings are projected to grow as food prices increase. The company will still be among the few stocks that perform well in the medium term.

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Archer-Daniels-Midland could decline to prices below $40 in the coming days and weeks. Bear market worries have gripped the market. Despite strong guidance on revenues and earnings, the price could edge lower before the market settles. Long-term investors should wait for lower prices.

The Archer-Daniels-Midland Company has an EPS of $5.45. That places the PE at 15.17. This is among the highest PE valuations in the sector. It then means that the stock is also likely to lose more than industry peers.

Archer-Daniels-Midland is at $77.42 and declining fast

Archer-Daniels-Midland shows an accelerating declining trend this week. The RSI is at 44 while the signal is at 67. The divergence from the signal shows that the price is falling faster than normal. The market is on a dysphoric selloff.

Summary

Though Archer-Daniels-Midland is a fundamentally strong value stock, the market correction worries. The stock is likely to lose as much as half its current value in the foreseeable future. We recommend selling now.

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