Ford is Preparing for Long Term Breakout
- Posted by Greg Harmon
- on April 25th, 2013
The Ford Motor Company, $F, reported earnings Wednesday and all eyes were focused on the number of Fusions sold and other metrics. More importantly to me the reaction to the report did nothing to reverse the current path that Ford is on, toward a move out of a 2 and a half year consolidation zone, in yellow in the chart below. It is as simple as a ‘W’ pattern that is the key. Well actually 2 ‘W’ patterns. The larger blue one completes at 18.50 and a move above would signal a move out of consolidation and a new leg high like the leg from the 2009 low up to the consolidation. The smaller purple ‘W’ is the catalyst to get
interested now. This smaller ‘W completes over 14.20 and gives it a free ride to the top of the zone at 15.77 and then the bigger ‘W’. For a long term holder entering at the current 13.47 with a stop just under 13 could pay fat dividends down the road. Oh yeah, and it does pay a fat 3% dividend as well. For those less interested in the dividend the January 2015 15 Strike Calls are offered at $1.20. With 21 months to sell premium against that you need to take in only 6 cents per month to end up owning them for free. Start buy selling the May 13 Puts, offered at 16 cents.
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Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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