What To Watch On Ford's Chart After The Stock Reacts To Q4 Earnings

Ford Motors Co F gapped down 2% lower on Thursday, rose up to fill the gap then fell down near to where the stock opened at the $20 level.

The price action was in sympathy to the SPDR S&P 500 SPY, which was weighed down by Meta Platforms, Inc's FB 26% plummet in reaction to the tech giant’s fourth-quarter earnings miss.

Ford will print its fourth-quarter earnings after the markets close on Thursday and traders and investors will be watching closely to see how the stock reacts in the after-hours session and in the pre-market on Friday.

After Ford printed its third-quarter earnings on Oct. 27, the stock gapped up 8.77% the following day and over the months that followed soared another 53% higher to reach a 52-week high of $25.87 on Jan. 13.

For that quarter, Ford reported earnings per share of 51 cents on revenue of $35.7 billion, which beat the Street consensus of of 27 cents on revenue of $32.5 billion. Refinitiv estimates the automaker will post earnings per share of 45 cents on revenue of $35.5 billion for the fourth quarter.

On Jan. 18, Ford announced it would also report special items as part of its earnings results including the reclassification of about $900 million of its first-quarter 2021 non-cash gain on the Rivian investment.

The lower-than-average volume on Ford’s stock on Thursday indicates traders and investors may be holding off on entering into a new position until they see how the stock reacts to the earnings print, which could be wise considering the reaction could be both volatile and irrational.

See Also: Ford's EV Sales Jump 167% In January Even As Total Vehicles Sales Flatline

The Ford Chart: By late afternoon only about 56.51 million shares of Ford had exchanged hands compared to the 10-day average of 123.41 million. This indicates there is a current lack of interest in the stock.

Ford is trading in a confirmed uptrend, with the most recent lower high printed on Jan. 28 at the $18.99 level. If Ford falls below the area following its earnings print the uptrend will be negated and the stock could be in danger of falling toward a lower gap between $15.92 and $16.55, which was left behind on Ford’s last earnings print.

Ford may also be settling into a bull flag pattern on the daily chart, with the pole formed between Jan. 28 and Wednesday and the flag forming on Wednesday and Thursday. The measured move, if Ford reacts bullishly to its earnings, is 11.23%, which indicates the stock could soar toward the $22 level.

Ford is trading below the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The stock is also trading below the 50-day simple moving average, which indicates longer-term sentiment is bearish.

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• Bulls want to see big bearish volume come in following the print to break the stock up from the bull flag pattern. There is resistance above at $20.51 and $21.69.
• Bears want to see a bearish reaction drop the stock into a downtrend, which increases the likelihood of Ford filling the lower gap. There is support below the $18.99 level at $17.19 and $16.45.