Working Money magazine.  The investors' magazine.
Traders.com Advantage

INDICATORS LIST


LIST OF TOPICS





Article Archive | Search | Subscribe/Renew | Login | Free Trial | Forgot ID?


PRINT THIS ARTICLE

TECHNICAL ANALYSIS


A Developing Bottom For Ford Motor Co.?

03/05/04 01:28:40 PM
by Kevin Hopson

Analysts and investors have been betting against Ford Motor Co. in recent months but don't let the negative sentiment fool you.

Security:   F
Position:   Accumulate

Ford Motor Co. (F) has been in a short-term downtrend since early January, when the stock proceeded to put in a double top just above the $17.00 level. However, there are signs of a forthcoming bottom in the stock, as bullish divergences on the chart and continued pessimism towards the company are currently supporting this theory.

Looking at the six-month chart of Ford, you will notice that the relative strength index (RSI) and moving average convergence/divergence (MACD) have been moving higher even though the stock recently put in a lower low. Additionally, money flow has turned positive and the 61.8 percent retracement ($13.06) from the Oct. '02 to Dec. '02 rally is coming into play at slightly lower levels. As a result, this retracement level could act as the ultimate bouncing point in the near-term.

Graphic provided by: Stockcharts.com.
 
If you turn your attention to market sentiment, you will see that investors are extremely pessimistic towards the company. Only three of the 16 covering analysts currently have a buy rating on the stock, while short interest (as of Feb. 9) sits at 78.1M shares - or nearly 6.0x normal daily volume. Additionally, the stock's put/call open interest ratio has risen to 1.29 from 0.81 over the last month and a half. This means that investors have been buying more puts than calls during the stock's recent downturn -- usually a sign of a forthcoming bottom. As a result, I would look to accumulate shares of Ford Motor Co. in the near-term. Given the company's solid dividend yield of nearly 3 percent, traders can afford to be more patient with this one.



Kevin Hopson

Kevin has been a technical analyst for roughly 10 years now. Previously, Kevin owned his own business and acted as a registered investment advisor, specializing in energy. He was also a freelance oil analyst for Orient Trading Co., a commodity futures trading firm in Japan. Kevin is currently a freelance writer.

Glen Allen, VA
E-mail address: hopson_1@yahoo.com

Click here for more information about our publications!


Comments or Questions? Article Usefulness
5 (most useful)
4
3
2
1 (least useful)

Comments

Date: 03/05/04Rank: 5Comment: 
Date: 03/09/04Rank: 4Comment: 
PRINT THIS ARTICLE





S&C Subscription/Renewal




Request Information From Our Sponsors 

DEPARTMENTS: Advertising | Editorial | Circulation | Contact Us | BY PHONE: (206) 938-0570

PTSK — The Professional Traders' Starter Kit
Home — S&C Magazine | Working Money Magazine | Traders.com Advantage | Online Store | Traders’ Resource
Add a Product to Traders’ Resource | Message Boards | Subscribe/Renew | Free Trial Issue | Article Code | Search

Copyright © 1982–2019 Technical Analysis, Inc. All rights reserved. Read our disclaimer & privacy statement.