Investing in AutoNation, Ford, GM and Tesla

NEW YORK (TheStreet) -- Last week, at the 2014 University of Tampa Fellows Forum, AutoNation (AN) Chairman and CEO Mike Jackson gave an upbeat assessment of the automobile industry.

AutoNation sells and services more than 300 models from more than 30 brands of cars and trucks, both new and used, at more than 225 locations from coast to coast. Last week it announced total retail sales of new vehicles in February rose 4% year over year to 21,987 vehicles. On Jan. 30 AutoNation reported earnings per share of 83 cents a share, beating analysts' estimates by 6 cents.

Jackson credited a vibrant vehicle financing program for a healthy auto industry, saying car payments are made before credit card payments and mortgage payments. This fact is a key factor in a resurgent automobile industry.

He talked about the ingenious technologies developed by Tesla Motors (TSLA) in its luxury electric automobiles but thinks Ford Motor's (F) aluminum version of the Ford F150 pickup truck is more exciting advanced technology because the truck would weigh 800 pounds less than the steel version.

Of course, AutoNation has a big advantage over the other dealerships -- it doesn't make the vehicles it sells. So let's look at the companies. A detailed technical analysis chart about these stocks follows.

AutoNation ($53.65, up 8% YTD): The stock set an all-time intraday high at $54.49 on Sept. 20, then declined to its 2014 intraday low at $46.38 on Jan. 17 when it was below its 200-day simple moving average at $48.67 for four days. The stock challenged the all-time high on March 7. The weekly chart is positive but overbought with its five-week modified moving average at $51.69 and the 200-week SMA at $37.83. Semiannual and quarterly value levels are $51.18 and $50.16 with semiannual and monthly risky levels at $56.17 and $56.26.

Ford Motor ($15.51, up 0.5% YTD): The stock set a multiyear intraday high at $18.02 on Oct. 24, then traded to a 2014 low at $14.40 on Feb. 3, and has been below its 200-day SMA at $16.34 since Jan. 24. The weekly chart shifts to positive given a close this week above its five-week MMA at $15.52 with its 200-week SMA at $13.31. Weekly and annual value levels are $14.89 and $14.03 with quarterly and semiannual risky levels at $16.68 and $16.73.

General Motors (GM) ($37.09, down 9.2% YTD): The stock set its post-bankruptcy intraday high at $41.85 on Dec. 17 and Dec. 26, then traded down to its 2014 intraday low at $34.36 on Feb. 6. The stock is now just above its 200-day SMA at $36.53. The weekly chart shifts to positive given a close this week above its five-week MMA at $37.20. Semiannual and weekly value levels at $36.09 and $33.71 with monthly and quarterly risky levels at $40.23 and $41.02.

Tesla Motors ($238.84, up 58.8% YTD): The stock set its latest all-time intraday high at $265.00 on Feb. 26 and is well above all four moving averages in today's 'Crunching the Numbers' table. Tesla has not been publicly-traded long enough to have a 200-week SMA. My quarterly value level is $142.81 with monthly and weekly risky levels at $249.38 and $267.08. The monthly level at $249.38 was a pivot last week as March began.

Crunching the Numbers with Richard Suttmeier

There are five columns with moving average titles: Five-Week Modified Moving Average, 21-Day Simple Moving Average, 50-Day Simple Moving Average, 200-Day Simple Moving Average and the 200-Week Simple Moving Average.

The column labeled 12x3x3 Weekly Slow Stochastics shows the pattern on each weekly chart with readings from Oversold, Rising, Overbought, Declining or Flat.

Interpretations: (stocks below a moving average listed in Red are below that moving average)

Five-Week Modified Moving Average (MMA) is one of two indicators that define whether or not a weekly chart profile is positive, neutral or negative. The other is the status of the 12x3x3 weekly slow stochastic.

A stock with a positive technical rating is above its five-week MMA with rising or overbought stochastics.

A stock with a negative technical rating is below its five-week MMA with declining or oversold stochastics.

A stock with a neutral technical rating has a profile that is not positive or negative.

The 200-Week Simple Moving Average (SMA) is considered a long-term technical support or resistance and as a "reversion to the mean" over a rolling three to five year horizon. (even Apple declined to its 200-week SMA in June 2013)

The 21-Day Simple Moving Average is a short-term technical support or resistance used by many hedge fund traders to adjust positions. A stock above its 21-day SMA will likely move higher over a rolling three to five day horizon and vice versa.

The 50-Day Simple Moving Average is also a technical support or resistance used by many strategists and commentators in financial TV.

The 200-Day Simple Moving Average is another technical support or resistance and I consider this level as a shorter-term "reversion to the mean" over a rolling six to 12 month horizon. (even Apple tested or crossed its 200-day SMA in nine of the last 10 years)

Value Levels, Pivots and Risky Levels are calculated based upon the last nine weekly closes (W), nine monthly closes (M), nine quarterly closes (Q), nine semiannual closes (S) and nine annual closes (A). I have one column for pivots, which is a magnet for the period shown. The columns to the left of the pivots are first and second value levels. The columns to the right of the pivots are first and second risky levels.

Investors who wish to buy a stock should use a good-until-canceled GTC limit order to buy weakness to a value level. Investors who want to sell a stock should use a GTC limit order to sell strength to a risky level.

At the time of publication the author held no positions in any of the stocks mentioned.

Follow @Suttmeier

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff

Richard Suttmeier is the chief market strategist at ValuEngine.com.

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