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Ford Stock Is Lower This Week. When to Buy the Dip? The Chart Hints.

Ford stock is down about 10% this week. Is this an opportunity for the bulls or do they need to see more downside first?

Ford  (F) - Get Ford Motor Company Report stock has been weak the past few days. Is that a buying opportunity?

On Thursday it was down as much as 3.4% shortly after the open. It's now up a bit on the day. That’s after the bulls finally got a strong open and a continuation rally in the broader market.

The gap-down action in Ford also follows yesterday’s painful move, where the stock lost 7.9% after Tuesday’s 3.2% drop.

The stock was active yesterday after the Dearborn, Mich., automotive icon booked more than $8 billion in gains from its Rivian  (RIVN) - Get Rivian Automotive, Inc. Class A Report investment.

And that was after it hit new highs in the prior week on reports that Tesla’s  (TSLA) - Get Tesla Inc Report  Cybertruck was facing delays.

In late December, the bullish catalysts were piling up and we called for the stock to break out even further.

After this week’s dip, let’s take another look.

Trading Ford Stock

Four-Hour chart of Ford stock.

Four-Hour chart of Ford stock.

Despite today’s modest rebound, Ford stock is still down for the week, by more than 10%.

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The move comes after the stock had rallied in the previous four weeks and as it works on its fifth straight monthly gain.

When I look at the chart, I see some positives and some negatives.

The bad news first: Clearly, Ford has broken below a number of short-term moving averages. Worse, it’s struggling to regain the 21-day moving average and the $23 level.

While the $23 level was a notable upside extension area, the stock’s inability to reclaim it does create questions about how much strength the buy-the-dip crowd really has.

Specifically, it makes me wonder: “Does Ford stock need to pull back a bit more?”

Back above $23 and the $23.40 to $23.50 zone is in play next, which is followed by some of the short-term moving averages on the four-hour chart.

For investors who want to ignore the four-chart, they can look for a test of the 10-day moving average, then the $25 mark.

With this morning’s move lower, Ford filled the gap from Jan. 3 at $21.88. If it takes out that mark again, the daily VWAP measure and the 50-day moving average could be in play.

That’s the area I have my eye on if Ford really does “need to pull back a bit more.”

Otherwise, let's see whether it can reclaim some of these upside levels. So far, today's bounce is leaving some questions marks, but we'll see how it closes. 

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