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Trading Ford as the Automaker Unveils Electric F-150 Lightning

Ford is climbing after the unveiling of its electric F-150 Lightning. Here's how to trade the stock now.

Ford  (F) - Get Ford Motor Company Report stock was catching a boost on Thursday, up about 3% after the company showed off its new electric F-150 pickup truck.

The automaker took the cover off its latest push toward electric vehicles. The truck, fittingly, is named the F-150 Lightning.

Only this one is all the more important given that the F-Series is not only the best-selling vehicle for Ford, it’s the best-selling vehicle in the country. It’s extremely important for Ford to get the electrification of this vehicle correct.

Management is banking on the strength of the F-150 brand luring in customers who are looking for an electric pickup option. The truck cosmetically is much different than Tesla’s  (TSLA) - Get Tesla Inc. Report planned Cyber Truck. 

Customers should be happy with the automaker’s plans to start the vehicle out at just $40,000.

Investors have to be happy that Ford believes it will produce 40,000 units or more once production ramps up in 2023 and expects it to be profitable starting next year.

What do the charts say of the news?

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Trading Ford

Daily chart of Ford stock.

Daily chart of Ford stock.

It’s been a long time since the market has been able to say that traditional automakers like Ford and General Motors  (GM) - Get General Motors Company Report were on fire.

Despite the hit from COVID-19, the automakers soared into 2021. Specifically with Ford, shares kept on rallying until topping out on March 15. This is notable because even as Tesla, NIO  (NIO) - Get NIO Inc. American depositary shares each representing one Class A 蔚来汽车 Report and other EV and growth stocks were under intense selling pressure, Ford was continuing to drive higher.

I prefer to watch key moving-average trends, retracements and the highs and lows of key timeframes (such as the weekly or monthly levels). However, it’s hard to deny the recent trends of Ford stock.

After losing a key uptrend mark in late March, this measure turned to resistance. That set the tone for a shorter-term downtrend to take place. However, I view this as very healthy consolidating price action, particularly on the weekly charts. 

It also comes as automakers slog through a semiconductor shortage

Even though Ford stock is pulling back from the day’s high, it’s still above the 50-day moving average and downtrend resistance.

I want to see shares clear $12.60, then push up toward the April high near $13. Above that and the 52-week high at $13.62 is in play.

On the downside, bulls hope to see the 21-day and 50-day moving averages act as support. Below them could put the 21-week moving average in play, followed by the $11.25 to $11.35 area.