Is Ford the Best Auto Stock to Buy Now?

Ford has been a tremendous winner over the past few months. Can it continue higher? Let's look at the chart.
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Ford  (F) - Get Report quietly has become one of the best performers in the market.

When it comes to auto stocks, many investors go right to electric vehicles, with the leader in EV being Tesla  (TSLA) - Get Report. If it’s not Tesla they’re after, it’s often NIO  (NIO) - Get Report.

Well, it’s time to give Ford a little more love.

As TheStreet’s Martin Baccardax pointed out, Ford’s become the best-performing U.S. auto stock over the last six months, particularly compared with Tesla.

With Ford up more than 3% on Monday to new 52-week highs and Tesla down more than 2% on the day, that performance gap is widening.

Plus, with Ford hitting new recent highs, Tesla is hitting new recent lows. The charts could set up for another push lower too. Now let’s look at Ford.

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Trading Ford

Weekly chart of Ford stock.

Weekly chart of Ford stock.

Ford made quite the decline from its 2020 highs, ultimately falling more than 57% and being forced to ax its dividend in an effort to preserve cash.

It wasn’t until January 2021 before Ford recovered its losses from the first quarter of 2020, but the stock hasn’t slowed since recouping those losses.

In fact, the gains have only accelerated. Shares are up an impressive 46% this year, besting General Motors’  (GM) - Get Report gain of 34.4% and Tesla’s 16% dip.

Amid the rally, shares paused at the 100-month moving average before ultimately powering through and tagging the 161.8% extension.

From here, I want to see a few things. On the upside, let’s see if Ford can push through this extension, putting $14 on the table. This was a key support/resistance zone a few years ago.

If Ford respects it, there will be reasonable support levels below to buy the dip (more on that in a second). Above $14 and the two-times range extension comes into play just below $15.

On a dip - either after a push higher or even from current levels - I want to see the 100-month moving average act as support. Below that and the 10-week moving average will be key.

This measure has been in play as support for months now. Should it fail, it will put the 21-week moving average on the table, as well as a possible key test of the $10.50 level. That to me would be a potentially great buying opportunity, even though it would require a correction of almost 20% from current levels.