Tech Is Slipping, But ADP Is Ripping

The market’s retreat from technology has been swift & sharp, but the broader tape is telling a more nuanced story: capital isn’t simply moving to the sidelines; it’s finding opportunities in other corners of the market. One name that has quietly built an impressive trend amid that rotation is Automatic Data Processing (ADP), which bottomed in the spring, established a pattern of higher highs and higher lows, and broke out to fresh 52-week highs in August before consolidating through September and regaining momentum in October. What makes the setup particularly interesting is that ADP has carried a PowerTrend Buy signal since July, triggered when its one-month price closed above its 10-month moving average. That distinction matters because PowerTrend filters out much of the short-term market noise, identifying stocks with established, durable uptrends rather than temporary bursts of strength.

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There are a couple of ways I’d look to approach ADP, from simply purchasing shares to using options for a more capital-efficient expression of the bullish thesis. One approach worth considering is a slightly in-the-money call, which provides exposure to further upside without requiring the same capital commitment as owning the stock outright. For example, one ADP call currently offers the potential for a 150.9% return at expiration if the stock advances 10% from current levels—a compelling illustration of how options can magnify a move in the underlying stock, although the actual outcome depends on ADP’s price at expiration and the option’s cost.

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