Ford Stock Prints This Bullish Reversal Pattern: What To Watch

Ford Motors Co F began deliveries of its electric Mustang Mach-e GT two weeks early according to a report from Electrek. A macheforums poster from Cedar Rapids, Iowa picked up the new vehicle on Thursday night from the dealership.

Ford’s stock has been trading in a steep downtrend, making lower highs and lower lows since reaching a June 4 high of $16.45. On Thursday Jim Cramer said on CNBC the company was suffering due to production difficulties amid a global chip shortage but urged investors to hold they’re shares because, he says, Ford is doing better than all other vehicle manufacturers.

The Ford Chart: Ford’s stock has fallen almost 25% over the past three months and in its downtrend settled into a bearish head-and-shoulder pattern with the left shoulder created between July 20 and 27, the head between July 28 and Aug. 5 and the right should between Aug. 6 and 17. On Aug. 17 the stock reacted to the bearish formation and broke through the neckline of the pattern and retraced 6% before bouncing from the $12.38 level on Friday.

The bounce up from the level caused Ford’s stock to print a bullish hammer candlestick on the daily chart which often indicates a trend change to the upside. Monday’s candle will need to print for confirmation the stock reacted to the pattern.

Ford’s relative strength index was measuring in at just over 30% on Friday. For technical traders this may be a buy signal since the stock is close to oversold conditions. On July 19 when Ford dropped down near the 30% level the stock bounced up almost 12% over the following three trading days.

Ford is trading below both the eight-day and 21-day exponential moving averages (EMAs) with the eight-day EMA trending above the 21-day, both of which are bearish indicators for the short-term. Ford is trading above the 200-day simple moving average, however, which indicates overall sentiment in the stock remains bullish.

• Bulls want to see big bullish volume come into Ford’s stock on Monday and for it to print a green candle stick that closes over Friday’s high of $12.67. The stock has resistance above at $12.79 and $13.62.
• Bears want to see big bearish volume come in and drop Ford’s stock down toward the $12 level. It is unlikely Ford’s stock will drop further than the level, before bouncing, because the 200-day SMA is also trending at $12 and will act as further support.