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Technical Analysis: What to Expect from Ford Stock This Week

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Ford Motor

Ford Motor (F) is one of the oldest and most well known automobile manufacturers in the world. It’s the second-largest by volume in the United States after General Motors (GM). It’s known for the innovation it brought to the automobile industry by introducing the moving assembly line concept of auto manufacturing.

In this part of the series, we’ll look at Ford’s recent performance on Wall Street and find out some key technical levels for the stock.

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Ford’s recent performance

Ford stock witnessed a massive fall after its 2Q16 earnings release on July 28, 2016. In its 2Q16 earnings presentation, the company highlighted the risks and cautioned investors about any possible downturn in US auto sales. This was followed by a massive sell-off of the stock.

Note that in the last few months, automakers (FXD), including Fiat Chrysler (FCAU) and Toyota (TM), have seen slowing US auto sales.

Since August 2, 2016, Ford stock has been rising, as you can see in the above graph. However, the underlying momentum still remains weak. Last week, the stock breached the lower range of this price channel. This technical level breach may attract renewed selling pressure in conjunction with weak industry fundamentals.

Key support and resistance levels

Ford witnessed a 1% fall last week and closed at $12.38 on Friday, September 9, 2016. The stock should find its next support near $12, which is lower than the price on June 27, 2016. A breach of this support area should attract renewed selling pressure toward a key horizontal support level of $11.45. On the upside, the price is likely to find resistance near $12.80.

In the next part, we’ll see how Fiat Chrysler’s movement last week is going to change its technicals.

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