Ford’s 3Q16 margins
On October 3, 2016, Ford Motor (F) released its US sales data for September. It sold ~204,000 vehicle units in the US for the month, which represents a YoY (year-over-year) fall of about 8%. However, September sales of Ford’s heavyweight vehicles performed well, which should help the company boost its 3Q16 margins.
Key support and resistance levels
On Friday, October 7, Ford’ stock ended the week on a positive note, showing a rise of 1.8% and closed at $12.07 on October 7, 2016. Notably, these were the highest gains for the stock since the last week of July 2016.
Last week, prices bounced back from a key support at $11.95. Only a breach of this support area should attract renewed selling pressure toward the next horizontal support level of $11.45. On the upside, the stock price is likely to find immediate resistance near $12.25, followed by a stiff horizontal resistance near $12.40.
Uncertainty on 2016 guidance
Ford was in the news recently, after US Republican presidential candidate Donald Trump criticized the company’s plan to shift some of its small car production to Mexico. (Read Can Penalizing Ford Make America Great Again? for more on how Ford responded to the criticism.)
In its 2Q16 earnings presentation, the company highlighted the risks and cautioned investors about any possible downturn in US auto sales. This presentation was followed by a massive sell-off in its stock.
Ford is the second-largest automaker by volume in the US after General Motors (GM). In the past few months, automakers (VCR) including Fiat Chrysler Automobiles (FCAU) and Toyota Motor (TM) have also indicated slowing US auto sales.
Continue to the next and final part of this series for a look at Fiat Chrysler’s technical indicators.