Ford Motor Co F was dropping almost 3% in the premarket on Monday, in tandem with Tesla after stock futures turned sharply negative prior to President Joe Biden delivering remarks on the economy.
The industry, including legacy-turning EV automakers, has been struggling under rising interest rates and stubborn inflation and news last week that SVB Financial Group has failed, stoked fear across the stock market causing many sectors to trade lower.
Last week, on CNBC's "Squawk On The Street," Mad Money host Jim Cramer recommended investors buy Ford after Morgan Stanley analyst Adam Jonas referred to Tesla, Inc’s TSLA Cybertruck as a “cult car” and recommended the model be released as a limited edition.
Tesla has been forced to slash the prices of its various models in both the U.S. and China amid softening sales due to higher levels of competition and a worsening economic outlook. To make matters worse, Tesla and Ford have both issued recalls recently, in Ford’s case for its F-150 Lightning pick-up truck.
For technical traders, Ford has both bullish and bearish indications on its chart and the price action on Monday and possibly Tuesday will determine at least the short-term trend.
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The Ford Chart: Ford negated its uptrend on Thursday by printing a lower high of $13.08 but the stock hasn’t yet confirmed a new downtrend by printing a lower low. If the stock fall under the Feb. 24 low-of-day at the $11.75 mark, a lower low will form, which will confirm the downtrend.
- If Ford reaches $11.75 and bounces up from that level, a bullish double-bottom pattern will form, which could indicate a reversal to the upside is on the horizon. If that happens, traders will want to see the stock eventually print a higher low, to indicate a new uptrend is on the horizon.
- If Ford bounces up higher on Monday, bearish traders will want to see the stock print a bearish reversal candlestick, such as a doji or shooting star candlestick, under $13 to indicate a rejection of a new uptrend. Bullish traders want to see big bullish volume come in and break Ford above that level.
- Ford has resistance above at $11.99 and $12.79 and support below at $11.17.
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