Ford Rallies Off GM's Q4 Success: 'Consumers Are Still Buying Cars'

The “sympathy” trade is working well in the automotive sector in Tuesday’s session.

An upbeat fourth-quarter report from General Motors Company GM and raised guidance is taking Ford Motor Company F along for the ride higher.

The price action in Dearborn's stock makes it the PreMarket Prep Stock of the Day.

Ford Having A Good Year: After declining 44% in 2022 ($20.77 to $11.63), Ford has participated in the rally to start 2023. While the S&P 500 was higher by 4.6% at Monday’s closing price, Ford was higher by nearly 11%.

Tuesday’s price action is widening that discrepancy. As of 1:45 p.m. EST, the index is higher by 0.79%, while Ford is higher by 4.12%.

The Catalyst: Before the opening bell, General Motors posted fourth-quarter EPS of $2.12, which easily beat the $1.69 estimate, and sales of $43.1 billion, which beat a $40.65-billion estimate.

GM significantly raised full-year EPS guidance to $6-$7 vs. a $5.81 estimate. PreMarket Prep's Take: Co-host Dennis Dick was surprised at the the big beat by General Motors.

“Consumers may be reducing their spending in other ways, because they are still buying cars,” he said. “They [General Motors] are steadily increasing their market share in EVs and ramping up the competition for Tesla.”

Technical Take On Ford: Ford caught an immediate bid following the earnings surprise from its counterpart in the sector and was trading actively at the $13.30 area.

Based on the continuing surge in General Motors shares and with the issue trading above Monday’s high, Ford's former daily resistance point should act as intraday support.

On the upside, Ford's 2023 high ($13.53) was the issue’s first resistance if the rally continued.

It should be noted the area was the point from which the issue broke down in mid-December. Over the course of six sessions (Dec. 13-20), the issue swooned on a closing basis from $13.57 to $11.47.

F Price Action: After a much higher opening Tuesday ($13.39 vs. $12.89), Ford worked its way just past the yearly high, peaking at $13.57, and reversed course.

The ensuing decline took the issue to a new low for session, but it was unable to reach the top of Monday’s range ($13.20), finding buyers at $13.25 and resuming its moves higher. As of 1:45 p.m. EST, it had inched its way back up, but has yet to make a new high for the session. If the high is breached, the next daily resistance point comes in at its Dec. 14 high ($13.78).

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