Keep It Simple: Ford Stock Is Rising So Buy It

• Posted by Greg Harmon
• on August 28th, 2014

Sometimes charts are made out to be more complicated than they need to be. Lines and colors and arrows pointing every which way. Indicators above and below. There is often some insight to be gained from these, but just as often there is a wealth of information to gather from just a simple view. The chart of Ford stock price below is one of those. It is just the price action on a daily basis, the 50 day SMA and a trigger based on them.

What can you tell from this chart? From November through to the end of March the stock was in a downtrend. You can see that it spent most of its time under the 50 day SMA, in the red area. There were couple of tests above it but they did not last long. But in April the stock had a change of character and began a trend higher. since then it has spent most of its time above the 50 day SMA, in the green zone. Again there have been tests below that have failed and the stock has moved higher.

Red = Downtrend, Green = Uptrend

Very simple chart and easy to read. Now how do you use it? Each of those tests that failed is a potential trigger. As it moves back into the colored zone it is a buy moving into the green, and would have been a short sale moving into the red. The buy signal triggered Wednesday. A more conservative trader might still wait for a move over 17.50 to confirm a break of the previous high. See, it does not have to be complicated.

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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