Perhaps Ford (F – Quote) investors were biding their time for the launch of the new aluminum body F-150. Or perhaps this is just an oversold bounce? Time will tell. Last month, with the stock trading at $13.78, I wrote a post highlighting how oversold Ford stock price was and why investors should have it on their watch list.
Here’s an excerpt from that post:
So what makes this an interesting setup? Well, a few things:
– The stock is nearing trend line support. Clearly, risk is defined in and around trend line support (12.50/13.00).
– The stock is oversold (currently under 30 RSI on weekly). Â Note the daily chart recently dipped under 15 RSI.
– The stock is on bar 8 (this week) of a weekly 9 buy setup (DeMark). This means that although the momentum phase of the drop may be over (a positive), there is still a chance of lower prices over the next two to three weeks.
Ford is now trading near $15.60 so I thought the timing was right to provide an update on Ford from a technical price perspective. In the chart below, I see 2 price levels of interest and some things to be mindful of:
- The stock recently touched the 50 percent Fibonacci retracement level ($15.69) from the summer highs to the October lows. This level also coincides with the 200 day moving average. Note the stock is attempting to consolidate here. How this shakes out will be important near-term.
- The next level higher is the .618 Fibonacci retracement level at $16.26. This level should serve as stiff resistance. A sustained breakout above this level would be constructive.
- The Relative Strength Index (RSI) has shot higher, nearing the overbought threshold of 70. There is room for another move higher near-term and as long as any pullback can hold above 50, it would be constructive.
- Any move below the 20 day moving average (not shown – currently at $14.61 and rising fast) would be a caution flag. And any move below $14.40 would really dampen bulls near-term rally hopes – that level is the October reaction high and February lows.
Ford (F) Daily Stock Chart
A look around the sector at fellow car makers shows some strength across the board. However, while Toyota (TM) is attempting to make new 2014 highs, Tesla (TSLA – Quote) General Motors (GM), and Ford have are all sitting well under their respective 2014 highs.
Thanks for reading.
Follow Andrew on Twitter: Â @andrewnyquist
No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
