Can Ford (F) Break Its Channel?

by Christian Tharp, CMT

Ford Motor Co. engages in the manufacture, distribution, and sale of automobiles. It operates through the following segments: Automotive, Mobility, Ford Credit, Corporate Other, Interest on Debt, and Special Items. 

Take a look at the 1-year chart of Ford (NYSE: F) below with my added notations…

Chart of F provided by TradingView

F has formed a down channel over the past several months. A channel is formed through the combination of a trend line support that runs parallel to a trend line resistance.  F is trading near the lower end of its channel, but the current market rally could lift it higher. 

The Tale of the Tape: F has formed a down channel. A long trade could be entered on a pullback to the channel support, which is currently approaching $10, or on a break of channel resistance. Short trades could be entered at channel resistance or if the stock were to break below the channel support.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!

Christian Tharp, CMT 

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Good luck!

Christian Tharp, CMT

www.todaysbigstock.com 

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