{"id":1525,"date":"2013-04-02T22:11:52","date_gmt":"2013-04-02T22:11:52","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=1525"},"modified":"2013-04-02T22:11:52","modified_gmt":"2013-04-02T22:11:52","slug":"4-2-13-fords-f-chart-could-go-either-way","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=1525","title":{"rendered":"4.2.13: Ford’s (F) Chart Could Go Either Way"},"content":{"rendered":"

Gary Morrow’s technical commentary: (The chart and comments are 24 hours old due to technical difficulties): <\/strong><\/em><\/p>\n

\"Click<\/a>
Click to Enlarge<\/figcaption><\/figure>\n

Ford Appears Headed Lower<\/strong><\/em><\/p>\n

Shares of Ford are beginning to look quite bearish.\u00a0 The stock began this week with a 1.75% drop on accelerating trade.\u00a0 The drop pushed F below the lower band of a six week bullish channel that had been in place since the February 25th lows.\u00a0 Despite overall mild\u00a0selling pressure\u00a0since the start of February the price action\u00a0has weakened since\u00a0Ford’s 50 day moving average\u00a0rolled over early last week.\u00a0\u00a0With today’s breakdown the stock is sending negative signals heading\u00a0into tomorrow’s sales numbers.<\/p>\n

If the news tomorrow is uninspiring I expect Ford will be headed for a re-test of the 2013 lows.\u00a0 The stock\u00a0underwent a healthy pullback following the\u00a0powerful Christmas Eve breakout and\u00a0by late February shares were\u00a0dipping below the January lows.\u00a0 The $12.00 area held in well ending the sell-off on February 25th.\u00a0\u00a0F mounted a healthy recovery rally\u00a0which lifted shares past the February highs but the move lacked\u00a0momentum.\u00a0 I believe this level will be tested again before a new rally\u00a0 can take hold.<\/p>\n

The support zone I am focusing on\u00a0includes the February lows, which approximate a 1\/3 retracement\u00a0of the bull move from\u00a0last summer’s double bottom, as\u00a0well as the November\/early December highs near $11.60.\u00a0 I believe a fade back down to this area followed by a period of basing action will provide a low risk buying opportunity for Ford bulls.\u00a0 I am long the stock and will be a buyer on weakness.\u00a0\u00a0An overreaction to neutral news tomorrow could\u00a0set the stage for\u00a0position building.<\/p>\n

Another\u00a0post news\u00a0scenario is a ramp higher\u00a0on better than expected results.\u00a0 This would certainly catch quite a few investors by surprise.\u00a0 A\u00a0surge past the\u00a0March\/February highs\u00a0on heavy trade would quickly turn the $13.30 to $13.50 area into key support.\u00a0 Once\u00a0past the previous two\u00a0monthly highs Ford would be\u00a0set up well for a run\u00a0up to the January highs of $14.30.<\/p>\n

Fundamental Commentary (Brian Gilmartin)<\/strong> <\/em><\/p>\n

Fundamentally, Ford (F)’s earnings estimates are getting trimmed, or being revised lower for 2013 and 2014, which isnt\u00a0what we like to see\u00a0as management guided\u00a0to a European\u00a0loss of $2 billion or $0.50 per share in the 4th quarter, 2012 call.<\/p>\n

Ford is trading at 9(x) price to auto-operations cash-flow and 5(x) price to total cash-flow, which is higher than we like, but cash-flow continues to improve. I do think the dividend will continue to increase.<\/p>\n

Current 2013 and 2014 EPS estimates are for $1.39 and $1.67 for zero growth in 2013, and an expected 20% growth next year.<\/p>\n

Expect any upside surprise to come from US margins, the US auto group, and lower losses than expected in Europe as that region stabilizes. When will that happen ? Hard to say.<\/p>\n

Today, Ford (F) has twice the shares outstanding as it did\u00a0 in the early 2000’s, so the $36 – $37 high in mid-1999 might translate into an $18 – $19 peak for this next rally, or where it traded in early 2010.<\/p>\n

We are going to remain long Ford in client accounts. Today’s auto sales were a plus, although a lot of it was already in the stock.<\/p>\n

I think Ford’s story now is all about Europe and whether management can contain the losses, and how well US auto sales and margins can offset Europe.<\/p>\n

Long F<\/p>\n

Trinity Asset Management, Inc. by:<\/p>\n

Brian Gilmartin, CFA<\/p>\n

Portfolio manager<\/p>\n

312-751-0996<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Gary Morrow’s technical commentary: (The chart and comments are 24 hours old due to technical difficulties): Ford Appears Headed Lower…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[15],"tags":[],"class_list":["post-1525","post","type-post","status-publish","format-standard","hentry","category-f"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/1525","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1525"}],"version-history":[{"count":9,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/1525\/revisions"}],"predecessor-version":[{"id":1536,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/1525\/revisions\/1536"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1525"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1525"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1525"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}