In 2016, Ford stock underperformed the broader market and its peers (XLY), including General Motors (GM), Fiat Chrysler (FCAU), and Toyota (TM). Ford’s deteriorating profitability and stagnation in its home market sales could be the key reasons for the underperformance. Last week, Ford continued to trade on a negative note and fell about 0.90%.
Dismal 2017 outlook
Last month, Ford released a dismal 4Q16 earnings report. Its earnings weren’t a big surprise since many analysts were already expecting the downward trend in its margins to continue. Last year, Ford highlighted the risks and challenges it might face in achieving its 2016 guidance.
During Ford’s 4Q16 earnings call, management didn’t seem very confident about its fiscal 2017 financial outlook. In fact, management warned investors of potential risks the company could face in the current fiscal year. That concern could be the primary reason for the prevailing negative sentiment for the stock.
To find out more about Ford’s 2017 outlook, be sure to read Market Realist’s series Ford’s 4Q16 Earnings: Another Disappointment?
Ford’s technical analysis
As of February 24, 2017, Ford stock was trading at $12.47. Technically, there were no major changes in its support and resistance levels. Earlier this month, the price bounced back from an immediate support near $12.20 but didn’t see much activity last week. A breach below this support could attract selling pressure in the stock and take prices to the next key support near $11.85. On the upside, an immediate resistance lies near $12.70.
Next, let’s look at Fiat Chrysler’s movement last week and its key support and resistance levels for the week ahead.