Key Takeaways
- Ford shares tumbled in premarket trading Thursday after the automaker reported quarterly earnings that came in below expectations and kept its full-year bottom-line outlook unchanged, as warranty costs continued to weigh on the company’s profitability.
- Since breaking out from a descending channel in late June, Ford shares continued trending higher for several weeks but have undergone a retracement in recent trading sessions leading into the carmaker’s quarterly results.
- Ford shares could attract buying interest at key chart levels including $12, $11.20, and $9.70.
- A bars pattern, which extracts the trending move from October 2023 to April this year and applies it from the descending channel’s low, projects an upside price target of around $16.
Ford (F) shares tumbled nearly 14% in premarket trading Thursday after the automaker reported quarterly earnings that came in below expectations and kept its full-year bottom-line outlook unchanged, as warranty costs continued to weigh on the company’s profitability.
Below, we take a closer look at the Ford chart and use technical analysis to locate key price levels to watch amid anticipated earnings-driven selling pressure.
Shares Undergo Retracement Ahead of Earnings
Since breaking out from a descending channel in late June, Ford shares continued trending higher for several weeks but have undergone a retracement in recent trading sessions leading into the carmaker’s quarterly results.
Moreover, the relative strength index (RSI) has fallen below overbought levels, indicating softening price momentum.
Monitor These Key Support Areas
Amid an earnings-related sell-off, investors should keep an eye on three key areas on the Ford chart where the shares could attract buying interest.
The first sits around $12, a level where the price may encounter support near the 200-day moving average (MA) and a horizontal line that cuts through a range of comparable price points from October 2022 to June this year.
A breakdown below this level could see the shares decline to the $11.20 region, where buyers may seek entry points close to a trendline connecting multiple swing lows that formed on the chart between September 2022 and January this year.
Finally, a more significant move lower could lead to a retest of $9.70, an area on the chart likely supported by bargain hunters looking for buying opportunities near this year’s low and beneath the psychological round number of $10 per share.
When monitoring the levels outlined above, consider using other technical indicators, such as the RSI, stochastics oscillator, and bullish candlestick patterns, as confirmation that the earnings-related pullback may be ending.
Projecting Longer-Term Upside Price Target
If the stock’s current uptrend rhymes with the move higher from October 2023 to April this year, we can use a bars pattern to forecast a future price target.
We do this by taking the bars pattern from that period and applying it from the low of the descending channel, which projects a target of around $16.
Ford shares were down 13.9% at $11.77 in recent premarket trading.
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As of the date this article was written, the author does not own any of the above securities.