Shares of Automatic Data Processing, Inc. (ADP) have made a steady climb over the past year, up 14%. Despite these recent gains, the company, which provides business outsourcing services worldwide, is not done rallying yet.

The stock has recently struggled to move past a strong resistance level on its chart, right at $119. Some market observers will look at the chart below and believe that the stock is done, concluding that this is a multiple top formation and that ADP shares are set to plummet lower. However, I don't think that's the case. My view is based on the support line that is depicting the trend for the share price.

Take a look at the chart:

Technical chart showing the performance of Automatic Data Processing, Inc. (ADP) stock

That support line shows that buyers are not giving up on this stock at all, and it suggests that the formation is an ascending triangle. The fact that its support line is trending upward shows that buyers are jumping in earlier and earlier on the pullbacks that do occur. This should ultimately lead ADP's stock to break out higher in the next few weeks.

Once the stock breaks above that resistance line, we can expect a $19 rally. We find this number by taking the first test of the resistance level – and we are being conservative – and then taking the low just before that point, which is around $100. The resistance point is at $119, so $19 is the difference. That gives us a $138 price target for ADP's move higher. Based on the current price of roughly $117, that implies a 16% rally coming up for the stock.

In sum, shares of ADP are not stuck in a multiple top formation and instead have formed an ascending triangle pattern. Shares will likely break out and continue climbing higher. A simple price target based on the ascending triangle formation gives us $138, or 16% upside potential from current levels.

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