Are the Auto Stocks Revving Up?

The auto stocks have rallied off the early July lows along with everything else in the stock market. These stocks are forming some daily chart patterns that may lead to some possible trading opportunities. Some individual names in this sector certainly look better than other auto names. Let's see what we come up with when we examine the charts. The first leading auto maker that has had a rough year is Toyota Motors Corp TM. This stock has had a real roller coaster of a move in the stock price since the company began issuing massive recalls in their Toyota and Lexus vehicles. The stock found recent support around the $68.00 level on July 2nd, 2010 which was a new low for the year. Currently Toyota Motors Inc could be forming a bullish pullback pattern on the daily chart by making a higher low pivot. The stock has minor support around the $69.35 level and much more support at the July low at $68.00. Should these levels fail to hold Toyota Motors Inc could test the $66.00 level as that is the next important support area. Ford Motors Co F is trading higher today by 0.26 to $11.73. This stock will report earnings on July 23rd, therefore, the stock is likely to remain near this level until the company reports earnings. Currently the stock should have very strong resistance around the $12.00 - $12.25 area. However, after earnings anything is possible as we have no idea what will be reported or said. Honda Motor LTD HMC has also been beaten down since March 2010. However, this stock does have a series of higher lows on the daily chart and that pattern should be respected. The stock does have some minor support around the$29.60 - $29.35 level. Should it bounce from the current pullback pattern on the daily chart the stock will have resistance around the $31.25 – $31.50 area. This chart actually looks attractive and has some room to run. All of the auto stocks have traded very poorly throughout 2010. Honda Motor LTD looks the best out the three leading companies. As long as the major market indexes hold up there could be an opportunity in this sector. However, should this market turn south and decline again these names could be the first to go down. So as for these auto stocks revving higher I would not be so certain. It is more like the auto stocks are just chugging along. Nicholas Santiago Chief Market Strategist www.IntheMoneyStocks.com