Why Ford's Stock Could Offer Investors 40% To The Upside In 2022

Ford Motor Co F was trading up about 4% higher on Monday as it continued to break out from a weekly bull flag pattern Benzinga called out on Dec. 13.

The legacy automaker has a lot of room for growth as it transitions to an electrical vehicle manufacturer due to its relatively low market cap of about $83.35 billion especially when compared to the sector leader, Tesla, Inc TSLA with its massive $1.17 trillion market cap.

Traders and investors looking for new positions as 2022 begins may find Ford an enticing longer-term hold because of its low market cap and relatively inexpensive share price.

On Monday, Zacks released its Top 10 Stocks and awarded Ford its no. 3 ranking. Zacks consensus estimate for Ford’s 2022 earnings and sales implies year-over-year growth of 2% and 13%, respectively for 2022.

The stock made a new 52-week high on Monday morning but looks set to head higher still as the company continues to release electrified versions of its models and boost its battery technology.

Investors with different timeframes in mind for trades will often look at different charts or a combination of charts, with short-term traders watching lower timeframes such as the hourly chart or even the 15-minute timeframe. Longer-term investors, however, are more likely to focus their attention on larger timeframes such as the daily and weekly charts.

With analysts expecting an extended winning streak for ford into 2022, Ford may be of interest.

See Also: Top 10 Most Searched Tickers On Benzinga Pro In 2021: Tesla, Apple, AMC, GameStop And More

The Ford Daily Chart: On Monday, Ford was attempting to bust up through a resistance level at $21.69, likely boosted by Tesla’s massive delivery beat.

• The stock hasn't traded above the level since Aug. 17, 2021, which indicates there is unlikely to be a lot of selling pressure above the level because most investors holding from before that date have likely moved on.
• There is a gap below on Ford’s chart, between $15.92 and $16.55, which may give bullish traders pause because gaps on charts fill about 90% of the time. It should be noted, however, that it could be an extended period of time before that gap fills.
• If Ford closes the day near its high-of-day price it will print a bullish kicker candlestick, which could indicate higher prices will come on Tuesday. If higher prices do not come, Ford may print an inside bar pattern in consolidation, which would also lean bullish because the stock was trading higher before creating the pattern.
• Ford has resistance above at $23.52 and $24.71 and support below at $20.51 and $18.99.

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The Ford Weekly Chart: On Dec. 6, Ford created a bear trap when it broke up from the weekly bull flag pattern but was dropped back into it do to volatility in the general markets. On Friday, Ford closed the trading week above the flag and on Monday bullish momentum gave the stock the follow-through needed to confirms the pattern.

• On the weekly chart, Ford’s relative strength index (RSI) is becoming extended at about 72%, which indicates the stock may need a long period of consolidation at some point. Traders using the weekly chart will likely be holding for many weeks or months, however, and should expect periods of sideways or even downwards trading.
• The measured move of the bull flag is about 62%, which indicates Ford could trade up toward the $30 level at some point in the future, which could give traders taking a position a potential 40% gain, if Ford’s stock continues on its upward trajectory.