Trading Ford's Q2 Earnings Move On 'PreMarket Prep'

When an issue makes a large move in the after-hours or premarket session off an earnings report, it can be difficult to determine whether the move will continue in that direction. This is the scenario investors who are long Ford Motor Company F were confronted with following Dearborn's second-quarter beat. 

A simple way to attempt to predict how Ford would trade in Thursday’s session was discussed on Thursday’s "PreMarket Prep" Show, making it the PreMarket Prep Stock of the Day.

Ford's Sustained Rally Into The Report: Ford bottomed on July 5 at $10.61 and rebounded to end that session at $11.20. The issue gave investors only one more chance to purchase the issue for under $11: the following day, when it bottomed at $10.84.

Those lows came in just above its February 2021 low of $10.36.

Ford posted its high for the rebound ($13.19) and the highest close for the rebound, which was the exact same price.

Ford's Q2 Beat: After the close on Wednesday, Ford Motor reported quarterly earnings of 68 cents per share, which beat the analyst consensus estimate of 45 cents by 51.11%. This is a 423.08% increase over earnings of 13 cents per share in the same period last year.

Ford posted quarterly sales of $37.91 billion, which beat the analyst consensus estimate of $34.32 billion by 10.46%. This is a 57.12% increase over sales of $24.13 billion during the same period last year.

The company raised its quarterly dividend From 10 cents to 15 cents per share and said it plans to advance its Ford+ growth plan by locking up battery capacity and raw materials to support a 600,000 electric vehicle run rate by end of 2023.

PreMarket Prep's Take On Ford: When the issue was being covered on the show Thursday, it had already established its after-hours high ($14.31) and was trading actively at the $14 area.

The author of this article alerted investors that at $14, the issue was in the green by 81 cents, which is an outsized gain for the issue in a one-day move.

In order to immediately have more upside from the open, the issue needed to open and hold $14 to continue to test the premarket high, which came in just above its June 9 high ($14.17).

F Price Action: Ford was unable to open above $14, but briefly traded above the level, reaching $14.09 before sharply reversing course.

The ensuing decline found support ahead of the top of Wednesday’s range ($13.19), only reaching $13.38 before resuming a move to the upside.

In what has been an impressive rebound off that low, the issue has returned to the $14 area but has yet to make a new high for the session as of 12:30 p.m. EST.

The fact that Ford has made back up to $14 and is now finding sustained buying may a good indication the issue is preparing for another leg higher.

The discussion on Ford from Thursday’s show can be found here:

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