This is an interest chart, since before the 2008 crash, Ford was only at 9 bucks, and it is currently being traded at $11 +. The recent highs have coincided with the 2005 highs. So this stock recovered very fast after 2008 and broke to new highs. One reason is that it was the only American Car manufacturer that didn't require help from the government and that the Cash for Clunkers program was used to stimulate car demand after the crash. The Cash for Clunkers program has now been terminated.
Ford also is part of the S&P 500, I will be doing a chart for that index next since i think there is some nice trades to be made.
Chart1: is the weekly to show the much inflated price of the current stock, The fact that it is above its 2008 highs is strange.
Chart 2: daily
Hmmm....
Lets take note of the violent bounce off the 50 day MV on Friday, this bounce pushed the stock lower to close below the 38.2% retracement, generally that means that a test of that 0 level is likely. However, there is the 20 and 200 day MV that may offer some support at the 23.6% retracement. If the stock breaks this level, look for it to go much much lower.
Trend Lines
At the 23.6% level there is light blue line I drew, this is the trend line connecting highs, as you can see we GAPPED up over that line 4 trading days back, and it appears that the market is looking to fill that gap. The purple line may also offer some support to this market and it dates pretty far back. The last level of support would be the lower range (light blue line), IF the stock breaks that level, the stock may be in a world of trouble since it has a far way to drop compared since it is near its 5 year high.
Bollinger bands:
They will offer some support also at the 9.90 to 10.10 level depending on where they move. However if we have people throwing in the towel bollinger bands may not be able to provide anything but consolidation bounces along the way down.
MACD - not visable.
The macd is leveling out and the histogram should have had a lower tick Friday than the thursday indicating a roll over.
Slow Stoch
Guess what? yup overbought still, so shorting only makes sense, you never want to buy into a market that is overbought. Look what happened to the over bought condition on April 26th? A huge tumble.
Volume
The volume for the day was not overly high, it was on the same level as the previous bull days. However, I included it because of the history of volume. Look at April and May. Almost all volume that is above average is BEAR volume, they have not yet stepped into this market, so if you see a large increase in bear volume, expect steep declines in this stock.
How to play this stock? At this point I would get into it basically anywhere, if you wanted to you could hold off and wait until some of that strong support is broken, such as the 20 and 200 day moving averages, and the 23.6% retractement with stop losses just above key resistance areas.
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