Ford Motor Co. (F:NYSE)
Price at Preparation: $11.11 (August 26th, 2024)
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What they do
Ford Motor Co. (F:NYSE) engages in the manufacture, distribution, and sale of automobiles. It operates through the following segments:
- Ford Blue, Ford Model E & Ford Pro: The sale of Ford and Lincoln vehicles, service parts, and accessories, together with the associated costs to develop, manufacture, distribute, and service the vehicles, parts, and accessories.
- Ford Next: Involved in the expenses and investments for emerging business initiatives aimed at creating value for Ford in vehicle-adjacent market segments.
- Ford Credit: Primarily vehicle-related financing and leasing activities.
- Corporate: Includes corporate governance expenses, past service pension and OPEB income and expense, interest income and gains and losses from cash, cash equivalents, and marketable securities, and foreign exchange derivatives gains, and losses associated with intercompany lending.
Welcome to Theta Bandits Top Pick Tuesday. We strive to bring you relevant free content, searching markets and making plans to be ahead of what we think could be new potential winners in any portfolio This week we are attacking a range play – let’s find out what that means.
Opinion
Since mid-2022 the Ford Motor Company (F:NYSE) has been very range bound between roughly $10 USD to $16 USD. In the past 52 weeks, Ford has ranged from a low of $9.49 USD to a high of $14.85 USD. The stock price at the time of this article is $11.11 USD, which is not quite the bottom of the range, but still has room to run. This “room to run” give us an opportunity to make a trade and potentially capture partial upside at the high end of the range before a potential retracement down.
Analysts have a street consensus of 10 Buys, 15 Holds, 2 Sells and the 12-month Price Targets (PT) as follows:
- Low: $10.00 USD (-9.99%)
- Average: $13.42 USD (+20.75%)
- High: $20.00 USD (+80.02%)
Plan
As usual, find the visual aid below with following colors:
- Blue: 52-week high.
- Red: 52-week low.
- Green: 12 Month PTs (high / avg / low).
- Orange: Support/resistance lines
- Purple: year demarcations.
- Yellow: Our plan and targets.
In the accompanying visual aid for the Ford Motor Co. (F:NYSE) chart, note the length of the timeframe used to show what we are looking at for this trade. The purple lines demarcate years and the yellow box shows the range that we discussed above. We did modify the bottom of the box to highlight where a strong base around the $11 USD marker is present. That base has been broken twice to give us the $10 USD range. Fortunately, the stock has crossed back through the $11 USD strong base marker, which gives a higher probability of the price moving directionally higher up the range profile.
Targets have been identified as the resistance lines moving up to the top of the range, at which point only profits should be kept continuing in the trade. As always, we identify potential points to either secure partial profits or set / update stop-losses as we cross through these levels. The target support / resistance levels on the visual aid are $13.42, $14.30, 14.96 with bonus targets of $15.54 and finally $16.20 (all USD) – which represents a 20% – 45% price movement.
We have only looked at one method to trade this position. To learn about other methods of attack on a trade like this, sign up to attend our weekly Theta Bandits Webinar – When we trade together, we learn together!
RISKS
The goal is to grow capital by securing profits along the way and limiting losses. Make sure to plan to trade within your risk tolerance, allowing time for success while updating limits and exit points to mitigate risk.
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Disclaimer: This article is for informational and educational purposes only, not investment advice. We recommend researching and consulting with a financial advisor before making investment decisions. All actions based on this information are at your own risk.
