Ford Motor Co F is set to print its first-quarter financial results after the market close. The heavily beaten-down stock was trading slightly higher heading into the event but remains down over 40% from the Jan. 13 52-week high of $25.87.
When the legacy-turning-electric vehicle manufacturer printed its fourth-quarter results on Feb. 3, the stock was trading in a steep downtrend. The earnings release accelerated the move and Ford gapped down the following day and continued to slide lower throughout the first quarter and into the second quarter.
For the fourth quarter, Ford reported an adjusted EPS of 26 cents, which missed the analyst consensus estimate of 45 cents. Revenue was up $2.04 billion over the same period the year prior.
For the first quarter, analysts expect Ford to report an EPS of 45 cents on revenues of $35.5 billion.
From a technical analysis standpoint, Ford’s stock has both bullish and bearish patterns and the reaction to the stock’s earnings print will determine which pattern is dominant. It should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat.
Options traders particularly, those who are holding close dated calls or puts, take on extra risk because the intuitions writing the options increase premiums to account for implied volatility.
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The Ford Chart: Ford has been trading in a fairly consistent downtrend since Jan. 13, with the most recent lower high formed at $16.57 on April 21 and the most recent confirmed lower low printed on April 7 at $14.56. On Wednesday, Ford didn’t fall low enough to create another lower low, which may indicate the downtrend is coming to an end.
- When Ford held above the last lower low, it created a quadruple bottom pattern paired with the trading range of the last two trading days. If Ford reacts bullishly to its earnings print, this bullish pattern will become dominant.
- The most recent decline in Ford, which took place between April 21 and April 25, paired with the sideways consolidation that has taken place since, has formed the stock into a potential bear flag pattern. If the reaction to earnings is bearish, the bear flag will be recognized and, because the measured move of the pattern is about 12%, a drop from the flag could cause Ford to fall toward the $13 mark.
- Ford has resistance above at $15.51 and $16.45 and support below at $14.34 and $12.79.
See Also: Ford CEO Jim Farley Says Another EV Truck In Works