Archer Daniels Midland is one of the largest food processing companies in the world. At the start of July the company announced the acquisition of WILD Flavors, a global market leader in natural flavoring ingredients. The acquisition may work well for Archer Daniels Midland.
Over most of the past two years I have done primarily stock trading with Archer Daniels Midland Stock but the recent acquisition has pushed up the volatility in the stock as investors speculate over whether the stock is overvalued, undervalued or fairly valued depending on the success of the merger. This volatility has created more opportunities for option trading as well as stock trades.
Archer Daniels Midland Stock Daily To July 30 2014
You can see in the ADM stock chart below that the close of July 24 at $48.43 has marked the high for this latest rally. ADM Stock closed at $46.74 today (July 30) near the day’s lows. This is a drop of 3.5 percent which while not much of a drop, is the largest drop in the stock since July 11.
You can also see that selling volume continued to rise today. for the fourth day of selling in the stock. This has set Archer Daniels Midland Stock up for a number of trade opportunities but by using signals from the technical indicators I can stay flexible and profitable despite the decline. In fact the decline is welcomed as it provides even better put premiums and higher volatility.
Staying flexible in a trade is a key component to successive winning trades. In my opinion, adjusting trades when there is the possibility the trade may be in jeopardy and a profit can still be locked in is an important consideration to take.
Taking Losses Is Harmful
In every market taking losses is harmful to the overall portfolio. Locking in even a small profit continues to build a portfolio and preserves capital. It also means time, energy and capital does not have to be committed to try to recover losses, but instead can be used to generate additional income.
The rest of this article is for members. This is a strategy article that looks at a key component in having successively winning trades and protecting capital throughout a trade. It is 2150 words and will require 8 pages if printed.
Archer Daniels Midland Stock (ADM) Strategy Discussion
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Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.
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