Don't Ignore This Chart

Ford Stalls before Making Next Move

Arthur Hill | 

Ford (F) consolidated after a big advance and this consolidation looks like a bullish continuation pattern. First, industry group strength and the long-term uptrend are in Ford’s favor. Ford is part of the red-hot Global Auto ETF (CARZ), which is up over 20% from its April low and trading near a 52-week high. Long-term, Ford broke a big resistance zone in September and the 50-day EMA moved above the 200-day EMA in October. After a 19% -trend-reversing advance, the stock was entitled to a rest and this is exactly how a consolidation works. The trading range digests the gains, alleviates overbought conditions and paves the way for the next move.  A break above the October highs would end the consolidation and signal a continuation of the August-September surge. The consolidation sports a higher low over the last few weeks and also looks like a small ascending triangle. 

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--Arthur Hill CMT

Plan your Trade and Trade your Plan
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Arthur Hill
About the author: , CMT, is a Senior Technical Analyst at StockCharts.com. He has written articles for numerous financial publications including Barrons and Stocks & Commodities magazine. Focusing predominantly on US equities and ETFs, his systematic approach of identifying trend, finding signals within the trend, and setting key price levels has made him an esteemed technician. In addition to his CMT designation, Arthur holds an MBA from the Cass Business School at City University in London.
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