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How Ford Can Rally More Than 20% in Q4

After months of languishing, Ford stock finally has some bullish momentum. Let's look at the charts to see where it could go in the next few months.

Shares of Ford  (F) - Get Ford Motor Company Report have been trading quite well over the past few days, up 7% for the week and 5.5% over the last three days.

The stock is off its session high on Friday, but up 1.2% on the day and it’s unlikely that bulls will complain. Particularly when the S&P 500 is down 1% and all four major indices are lower on the day.

Like Ford, Tesla  (TSLA) - Get Tesla Inc Report has also been outperforming over the last few days and its stock could be setting up for a breakout of its own.

Ford was a top gainer on Thursday, aided by news that the company is doubling production of its all-electric F-150 pickup.

With Friday’s rally, the stock is hitting its highest level in more than a month. But as we look to leave behind the third quarter in just a few weeks, bulls are hoping we’re not talking about just a few days of gains.

Instead, they are looking for a much bigger push in the fourth quarter. Will they get it?

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Trading Ford Stock

Daily chart of Ford stock.

Daily chart of Ford stock.

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Ford stock gave bulls a really nice correction down to the 50-day moving average, but the bounce was tepid and support eventually failed. A few weeks later and the ensuing rally found resistance at the 50-day moving average.

As if investors needed any more proof at that point, it was clear that there was a change in tune for Ford stock.

It didn’t mean (or doesn’t mean) that it can’t rally or that it has hit a multi-year peak. It simply means that the short- and intermediate-term trends had turned bearish.

Finally though, bulls have something to smile about. After an “ABCDE,” five-wave dip down toward the 200-day moving average (but not to the 200-day), Ford stock is finding its footing and pushing higher.

It reclaimed the 10-day and 21-day moving averages on Wednesday, while also breaking out over downtrend resistance (blue line). Now it’s contending with the 50-day moving average again. 

As long as Ford stock holds up over $13, along with the 10-day and 21-day moving averages, bulls can justify a long position in the name. Over $14 and the stock can really start to gain some upside.

Ultimately, a push back to the June high near $16.50 could be in play if the stock continues to push higher, putting a potential 22% move on the table from current levels.

However, a close below $13 could put a test of the 200-day moving average in play.