How to Trade Ford Stock After Earnings

Shares of Ford (F) - Get Report are on the move after the automaker reported fourth-quarter earnings results on Wednesday after the close. Perhaps to some investors' surprise, the stock is up 3% Thursday. 

Non-GAAP earnings of 30 cents missed analysts' estimates by 2 cents a share, while a GAAP loss of 3 cents per share missed consensus estimates thanks to a special items charge of $1.8 billion. On the plus side, automotive revenue of $38.7 billion grew 50 basis points year-over-year and topped estimates. Overall revenue of $41.8 billion grew 1.2% year-over-year. 

Even better news though? The stock isn't declining on these mixed results. Despite some unexpected noise and a very poor international showing, shares of Ford are rallying. 

Ford had a tough 2018 as the company is looking for ways to not only position itself for the long-term, but also for the short-term amid an overall decline in sedan sales. As a result, the automaker is beefing up its SUV offerings for both its Ford and Lincoln lines -- as evidenced at this year's Detroit Auto Show -- and eliminating all but the Mustang from its sedan lineup. It's also putting more emphasis on its crossover and truck offerings.

Trading Ford Stock

Strategy aside, how is Ford stock holding up? Like the rest of the market, Ford plunged to its late-December lows near Christmas Eve. However, shares rallied in January and are now holding up just below the 50-day moving average.

Ford is certainly one of those "long roads ahead" kind of plays. But it's very encouraging that the stock is rallying on its earnings report. While the fourth-quarter report wasn't great, it also wasn't a disaster and that's giving investors a sigh of relief.

Shares of Ford have already done a good job of consolidating in the $8 to $8.50 area. It's also holding the 21-day moving average as well, another encouraging sign. As a result, bulls can exercise cautious optimism with Ford stock near current levels. Below $8 and/or the 21-day moving average will likely cause some concern and more than likely act as a stop-loss for some investors.

I would love to see F stock push through the 50-day now and hopefully get above downtrend resistance (blue line). Look to see if either of these levels keep Ford down.

This article is commentary by an independent contributor. At the time of publication, the author had no positions in the stocks mentioned.