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Ford Kicks Into High Gear

The automaker is breaking out in a volatile market
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In recent weeks, General Motors (GM) has been getting a lot of attention for its commitment to electric vehicles, or EVs. The venerable automaker recently introduced an all-electric version of the Hummer pickup truck, and plans to have a portfolio of 20 EVs by 2023. 

Not to be outdone, Ford Motor (F) has announced its own lineup of EVs. Ford's lineup includes an EV version of the Mustang, and an all-electric version of its popular F-150 pickup truck. 

One of the factors that has prevented some consumers from buying EV pickups is the issue of range. Recently, Ford filed a patent for a range-extending generator that could be accessed from the bed of the F-150. Only time will tell if that patent comes to fruition. 

Should investors own shares of Ford? Let's go to the chart to find out. 

Ford chart via TradeStation

Ford chart via TradeStation

Ford recently broke out of a bullish pattern known as an ascending triangle (black dotted lines). The upper barrier of that triangle is $7.40 (horizontal line). Notice how that line has acted as both resistance (down arrows) and support (up arrow). 

As long as Ford's price remains above $7.40, it's a buy and hold. Traders can limit their losses by exiting the trade if the price breaks below that level. 

Last week, Ford received a buy signal from its Chalkin Money Flow indicator, shaded yellow. This indicator turned positive on October 21st. 

Bottom line: by following the above strategy, investors can risk less than $1 per share on a company that is likely undervalued. 

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Ed Ponsi is the managing director of Barchetta Capital Management, and is the author of three books for publisher Wiley Finance. A dynamic public speaker, Ed has made appearances around the world, in such diverse locations as Singapore, Dubai, London, and New York. For more information about Ed and his work, click here