Auto stocks like Ford (F) made a stellar move off the lows. In fact, Ford stock rallied 57.2% off its 2022 low to last month’s high.
Even though Tesla (TSLA) seems to get all the attention, the move by Ford actually outpaced Tesla’s gain of 52.1%.
It helps that Ford stock has a low valuation and recently reinstated its dividend. Its push toward EVs also helps, as it recently electrified its F-150 and continues to see strong demand.
It hasn’t been completely smooth sailing though, as the automaker navigates global macro issues and has even had to slash jobs along the way.
However, the bad news hasn’t deterred investors, who bid the stock higher in late July following better-than-expected earnings and robust guidance.
That was enough to calm any real concerns among the bulls, but will that remain the case going forward as the bear market in equities begins to roar once again?
When to Buy Ford Stock
Daily chart of Ford stock.
Chart courtesy of TrendSpider.com
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After the company reported earnings, I took a look at Ford’s charts and mapped out the $16 to $17 area as a possible destination, noting the significant resistance in this area.
Ford stock topped out at $16.68, failing to push through the 200-day moving average. Before it went on that rally, it had struggled with $16 and after being rejected, it again struggled with the $16 level.
Going forward, that’s now a level we need to keep an eye on as possible resistance. That’s also around where the 200-day moving average would come back in play if Ford stock were to begin rallying.
Ford stock has been finding buyers on the dips, but overall, shares are down three weeks in a row. It is now below its short-term moving averages — the 10-day and 21-day — but continues to hold its intermediate-term moving averages, like the 10-week and 50-day.
So where will support come into play?
Perhaps Ford stock will bounce before this, but I have my eye on the $14 to $14.35 area. In this zone, we find the 38.2% retracement of the current rally, as well as the 50-day moving average and a significant breakout area.
If Ford shares dip to this level, buyers have an attractive risk/reward setup, as this zone should be solid support. If it’s not support, traders will know very soon and can limit their losses.
Otherwise, let’s see if this zone holds as support and can put $16-plus back in play.
Source: https://www.thestreet.com/investing/heres-where-ford-f-stock-may-find-strong-support?puc=yahoo&cm_ven=YAHOO&yptr=yahoo