Ford shares had a promising start to the year. Positive news regarding their electric vehicles helped a demand increase which saw the prices move higher. Despite this, the stock didn’t manage to avoid the market sell-off and prices moved lower.

Consolidation

When earnings released on February 3rd, prices took a further hit as revenues finished lower than expectations. Since then, prices have consolidated. We think it is worth noting as there may be a move to the upside from this.

The chart is setting up in an ascending triangle pattern as prices trade sideways. Volume was higher than previous days on Friday as prices moved up. Selling pressure ultimately came out on top as prices rejected above $18. A close above $18.60 would be a good indication that a reversal up may happen.

What are some other areas of support and resistance? Strong support below is the 200-day moving average at $16.45. This also coincides with a level that rejected twice since the pandemic (blue line). If prices were to fall below, the 200-day should see more buyers step in and hold prices.

If the price breaks above $18.60, we could see a move back into the area that prices fell from. This is also an area that prices consolidated in for several months towards the end of 2021. This zone is $19.10 – $20.80.

Chart provided by TradingView

Long term

Stepping aside from this short term analysis of the chart, what can the prices do throughout the rest of 2021. More positive news regarding the company’s shift towards electric vehicles will help the share price recover. However, much depends on general market sentiment. There will be a correlation between the two prices. If the S&P500 rallies up, Ford will most likely see recent highs again. If we see more downside, especially as tensions in Ukraine rise, the prices could continue to fall with the market.

We think sticking to shorter term moves protects you amongst the current uncertainty and Ford’s setup looks good.

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