Cramer on Archer Daniels Midland, plus a potential trade

Archer-Daniels-Midland Co. (NYSE: ADM) opened at $33.15. So far today the stock has hit a low of $33.71 and a high of $33.06. As of 11:40 this morning, ADM is trading at $33.59, up $0.63 (1.9%).

After hitting a one year high of $46.71 in May, the stock has been slumping over the past ten months, bouncing recently after hitting a one year low of $30.20 in January. Jim Cramer featured ADM in Stop Trading! yesterday, enthusiastically endorsing this stock as a buy right now, given agribusiness' position right now and ADM's clout in Congress. The technical indicators for ADM have been bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider an April bull-put credit spread below the $30 range. ADM hasn't been below 30 at all in the past year and has shown support around 31.10. This trade could be risky if ethanol loses some of the excitement it currently enjoys, but even if the stock falters, this position could be protected by the support just above 30.

Brent Archer is an options analyst and writer at Investors Observer (Free Subscription). DISCLOSURE: Mr. Archer (no known relation to the Archers of ADM) owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about.