Stock of the day: Ford

On May 10th, I highlighted a significant technical setup in Ford’s stock, noting a massive head and shoulders pattern delineated by blue rectangles. At that time, the crucial question was whether the price would break the neckline, marked in yellow, or rebound from it and breach the orange dynamic resistance connecting the top of the head and the right shoulder. Today, we have a definitive answer.

The right shoulder took some time to fully form, delaying the anticipated breakout. However, at the beginning of this week, Ford decisively broke the neckline of the head and shoulders pattern. This breakout has confirmed a bearish trend and aligns with the broader market sentiment, which has been predominantly negative. The downward movement underscores the validity of the head and shoulders pattern as a reliable indicator of further declines.

This bearish signal will remain valid as long as Ford’s price stays below the yellow horizontal resistance and the orange dynamic resistance. The recent price action indicates that sellers are firmly in control, pushing the stock lower. This breakout not only confirms the negative sentiment around Ford but also suggests that further downside potential exists. Traders and investors should watch these key resistance levels closely, as any attempt to retest them might offer opportunities to reaffirm the bearish outlook.

In summary, Ford’s recent price action has resolved the head and shoulders pattern to the downside, providing a clear sell signal. As the stock remains below critical resistance levels, the bearish trend is likely to continue, mirroring the overall negative sentiment in the market.

Source: https://www.axiory.com/analytics/stock-of-the-day/stock-of-the-day-ford-8