Ford Stock Forms Bullish Pattern In Consolidation: A Technical Analysis

Ford Motor Co’s F stock has been boosted by the company positioning itself as a competitor to Tesla Inc TSLA in the EV market. The U.S. government is also nearing agreement on its infrastructure bill which allocates $174 billion toward EV spending to help automakers produce affordable "made in the U.S." electric vehicles.

The hiccup in production comes from the ongoing global chip shortage and Ford and other EV producers are struggling to meet consumer demand in a timely manner.

Ford’s stock has retraced, in consolidation, from its June 4 high of $16.45 but looks as though it could be revving up for drive north.

See Also: How to Buy Ford Stock

The Ford Chart: Since reaching its new high, Ford has consolidated under a descending trendline, making consistent lower highs and lower lows down to the $13.74 mark where it may have put in a bottom. To confirm a bullish trend change, traders will want to see Ford’s stock make a higher high above the $15 mark but the stock may need to recharge under resistance for a while longer before attempting the move.

The retracement allowed Ford to fill a gap it left behind on May 27 near the $14 level, which should give bulls confidence going forward.

Ford’s stock has created a bull flag under the resistance of the descending trendline and a price history resistance level at $14.80. The pole of the bull flag was created between July 8 and 12 and the flag between Monday and Wednesday. Ford could trade downward in the flag for another day or two before possibly breaking up bullish from it.

Ford’s stock is trading slightly below the eight-day and 21-day exponential moving averages (EMAs) with the eight-day EMA trending below the 21-day EMA, both of which are bearish signs. Ford is also trading below the 200-day simple moving average which indicates overall sentiment in the stock is bearish.

It can be noted, however, that the stock is trading within 40 cents of each moving average so could easily regain their support.

Bulls want to see bullish volume come into Ford’s stock to break it up from the bull flag pattern. If Ford can trade back above the $15 level, it has room to move up to $15.52.

Bears want to see the bull flag pattern negated and for Ford’s stock to continue trending down until it loses support at $14.35. If Ford were to lose the area as support it could fall to $13.62 before potentially bouncing.

F Price Action: Ford traded down 1.2% to $14.24 at publication time.