Ford Stock Forms 2 Bullish Patterns Under This Indicator: Is A Bull Market On The Horizon?

Zinger Key Points
  • Ford is trading in a falling channel pattern on the daily chart and has set up a bull flag pattern on the weekly time frame.
  • If the stock breaks up from the patterns, Ford will regain the 200-day SMA, signaling a bull cycle.
Ford Stock Forms 2 Bullish Patterns Under This Indicator: Is A Bull Market On The Horizon?

Ford Motor Company F gapped up 1.37% to start Thursday’s trading session after a volatile session on Wednesday caused the stock to slip over 2% intraday before closing flat.

The legacy-turning-EV vehicle manufacturer announced it’s upping its total investment into Ford’s Halewood Plant on Merseyside, U.K. by £125 ($152.8 million U.S.) to aid its transformation into the EV space. This puts Ford’s total investment into the facility at £380 million.

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"Our vision in Europe is to build a thriving business, by extending leadership in commercial vehicles and through the electrification of our car range," said Kieran Cahill, Ford's European Industrial Operations vice-president.

Ford met an EV milestone on Wednesday, announcing it had produced its 150,000th Mustang Mach-E. The news was met with congratulations from Tesla, Inc CEO CEO Elon Musk, who’s EV company currently dominates the EV market share in the U.S.

As Ford continues to increase its EV offerings and ramp up production, its current 7% market share is sure to grow. From a technical perspective, Ford has settled into a bull flag pattern on the weekly chart, which could send the stock soaring over 30% if the market cooperates.

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The Ford Chart: On the daily chart, Ford has been trading within a falling channel pattern since Nov. 11, which has developed just under the 200-day simple moving average (SMA). A falling channel pattern is considered to be bearish until a stock breaks up from the upper descending trendline of the pattern on higher-than-average volume, which Ford attempted to do on Thursday but failed.

  • On the weekly chart, the falling channel, when paired with Ford’s 31% surge between Oct. 11 and Nov. 11, has set the stock into a bull flag pattern. When a bullish pattern develops on a large time frame, such as a the weekly chart, the move can take weeks to play out but can offer a higher degree of predictability.
  • On Thursday, when Ford attempted to break up from the falling channel pattern and bull flag, the stock rejected the 200-day SMA. The 200-day SMA is an important bellwether indicator and a stock is unlikely to burst through the area on the first attempt. If Ford breaks up from the bullish patterns and reclaims the 200-day SMA as support, the stock will enter into a potential bull cycle.
  • If Ford closes the trading session under the 200-day SMA, the stock will print a shooting star candlestick, which could indicate lower prices will come on Friday. If buyers come in later in the trading session and Ford closes near its high-of-day price, higher prices and confirmation of a bull flag break could be on the horizon.
  • Ford has resistance above at $14.34 and $15.53 and support below at $12.79 and $11.99.

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