Ford Motor Co. (F) was last in the showroom in early December where I wrote, "F is likely to get dragged lower if the broad market has made a minor peak." F pushed up to $13.50 in January but that strength was fleeting as prices gapped below the 50-day moving average and continued lower that month to break the 200-day average line.
The decline wasn't finished there and the broad market weakness last month spilled over to F and the August low around $10.50 was broken. Is spring going to bring a more positive outlook? Let's look at the charts and indicators to see if we are in Drive, Reverse or Park?
In this daily bar chart of F, below, we can see that prices are below the declining 50-day and the declining 200-day moving averages. The 50-day line just crossed below the 200-day line for a bearish dead or death cross.
Prices have been in roughly a $10.25 to $11.00 trading range the past four or five weeks and while we can see the daily On-Balance-Volume (OBV) line creep up slightly in February that is not enough evidence for me to suggest that buyers are happy with being aggressive buyers here.
The 12-day momentum study in the bottom panel is not showing a strong bullish divergence so we don't have that leading indicator to count on here.
In this weekly bar chart, below, going back three years we can see the pattern of lower lows and lower highs. The weekly OBV line has followed prices lower but has diverged in the past month - prices have made new lows and the OBV line has not made new lows. This divergence may or may not be meaningful. The 12-week momentum study is not diverging from the price action.
In this Point and Figure chart of F, below, we can see three lows at $10.18 and a downside price target of $8.38 being projected.
Bottom line: The price of F has been flirting with new lows recently and without strong signals that buyers are being aggressive. I would remain defensive on Ford.