How To Trade Ford Stock Before And After Q2 Earnings Print

Ford Motor Company F is set to print its second-quarter financial results after the market close today (July 27). The heavily beaten-down stock was trading more than 3% higher heading into the event but remains down over 50% from the Jan. 13, 52-week high of $25.87.

When the legacy-turning-electric vehicle manufacturer printed its first-quarter results on April 27, the stock was trading in a steep downtrend, which continued until July 5, when Ford reversed course.

For the first quarter, Ford reported an EPS of 38 cents on revenue of $34.5 billion. Both numbers topped consensus analyst estimates of 37 cents and $31.24 billion, respectively.

For the second quarter, analysts expect Ford to report an EPS of 45 cents on revenues of $34.32 billion.

Ahead of the event, JP Morgan analyst Ryan Brinkman maintained an Overweight rating on Ford on Tuesday but lowered the price target from $21 to $19.

From a technical analysis standpoint, Ford’s stock looks headed higher following the earnings print. It should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat.

Options traders, particularly those who are holding close dated calls or puts, take on extra risk because the intuitions writing the options increase premiums to account for implied volatility.

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The Ford Chart: Ford was attempting to break up bullishly from a bull flag pattern on Wednesday but lack of volume looked to be hampering a larger move. At press time, about 28 million shares of Ford had exchanged hands compared to the 10-day average of 50.56 million.

• If Ford is able to close Wednesday’s trading session above the upper descending trendline of the flag and near the high-of-day price, higher prices are likely to come again on Thursday if Ford’s earnings reaction is positive.
• If the stock closes the trading session within the descending channel of the flag, further consolidation may be needed before the stock chooses a direction. If the reaction to Ford’s earnings print is negative and the stock falls below the eight-day exponential moving average, the bull flag pattern will be negated.
• Ford has resistance above at $14.34 and $15.51 and support below at $12.79 and $11.99.

Photo: Courtesy Ford Co.