The Real Story: Taking a Test Drive at Ford

"It is not inconceivable for GM or Ford to have a product revival," Chris Atayan wrote on our sister site Street Insight.com earlier this week. "At some point these stories become interesting 'speculations' based on the notion of product revivals."

Pressed on when he would become interested, Atayan answered: "When they start building cars that people want to buy."

Like Atayan, I believe it's entirely possible Ford does in fact turn things around. And yes, costs are onerous. But I believe that, quite simply, if the company can sell more cars, its situation will improve.

However, I don't see any evidence that it's about to happen. But Jeff Spotts is an excellent stock-picker. Since its inception in May 2001, his firm has never had a down performance year, which is as specific as the hedge fund manager was allowed to be because of SEC regulations prohibiting marketing. If history repeats itself, you're better off betting with him than against him.

Back on the chart front, Spotts believes the volume on the shares indicates better times ahead for Ford. "Somebody is picking up shares down at these levels," he said. "If there was a bankruptcy risk, why is the stock trading higher than it was in March of 2003 when there were [also] rumors of bankruptcy?"

Based on his analysis, Spotts believes there is risk in Ford shares to about $7.80. He believes the stock will trade up to the $11-$12.50 range in the intermediate term.

Another reason to like the stock -- analyst sentiment is pretty dismal. Just two buys vs. nine holds and seven sells. Also, Moody's Investors Service just downgraded Ford debt deeper into junk status, effectively catching up to its rival Standard & Poor's. Generally speaking, the debt rating agencies are better at analyzing the past vs. predicting the future, and occasionally are good contrarian indicators.