Last Thursday Ford (F) - Get Report reached new October lows after reporting uninspiring third quarter results. Although further downside damage has been quite limited since the increasing overhead pressure appears to be gaining control as a new week begins.
In the near term, Ford may soon enter a new down leg and with it, a retest of the 2016 lows.
Back in late July Ford took a major hit after reporting its second quarter results. Just days before the July 28 release the stock was trading within pennies of its 2016 highs. The damaging breakdown that followed drove Ford over 14% lower during four straight days of heavy distribution. The stock managed to hold onto key support near the $12.00 area at its early August lows but only a modes rebound was the result.
Ford held this zone at the September lows as well but traction remained limited. Earlier this month, after a six day losing streak, the June, August and September support zone began to show signs of weakness. As October comes to a close this break of support is taking on a more ominous look.
As November begins Ford investors should expect further downside. A logical target is the $11 area. This major support zone held multi- week lows in late January and early February while shares were under extremely heavy pressure. Patient investors should view a successful retest of this zone as a low-risk entry opportunity. Until then Ford will likely prove to be a painful long.