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Ford Motor Stock Rallied. Here's Its Must-Hold Level.

Ford stock is hitting a seven-year high on better-than-expected earnings. Here's how we're managing the trade from here.

Ford  (F) - Get Ford Motor Company Report stock has had its foot on the gas pedal for more than a month now.

The Dearborn, Mich., automaker's shares are up almost 10% on Thursday after rising 13.4% earlier in the session. 

The stock has been trading really well along with General Motors  (GM) - Get General Motors Company (GM) Report. Of course, there’s been obvious momentum in Tesla  (TSLA) - Get Tesla Inc Report as well, as several auto stocks power higher.

What's helping drive the gains for Ford? First, the company beat on earnings and revenue expectations, while raising its guidance. That's a strong catalyst. 

Further, the automaker will reinstate its dividend on Dec. 1. That helped send the stock to seven-year highs. Now what?

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Trading Ford Stock

Daily chart of Ford stock.

Daily chart of Ford stock.

After the report, some investors are now talking about a potential double in Ford stock. It's possible, but let’s zoom in and focus a bit more on its short-term price movement.

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There is both good and bad with today’s post-earnings reaction. The good is obvious: Ford stock is rallying.

The bad is not ideal, but not the end of the world either, as shares pull back from Thursday’s high. It's not a great chart candle, but the bulls can make do with it considering the gains. 

Ultimately, this is a better reaction than a bearish reaction to earnings.

From here, let’s see if Ford stock can hold up over the June high at $16.45.

If it can’t, it puts the $16 level and the 10-day moving average on the table. Below that and we may need a test of the 21-day moving average.

On the upside, Ford already pushed into the first of my two upside targets, that being the $17.50 level. 

If, however, it can stay above the $16.45 level we just discussed, a push higher is possible.

Should Ford stock take out the post-earnings high, then the 261.8% extension of the larger range is possible, up near $17.75.

Beyond that, we’ll need to reevaluate Ford and take a look at some additional extension areas. For now, though, a move up through $17.78 would be pretty impressive action.