THE HEADLINE: Ford stock gets knocked down 5%, among the worst in the S&P 500
MATASII SII ORIGINAL ANALYSIS: APRIL 7th, 2018 CALL:
The weekly chart (below left) shows Ford steadily falling off since 2014. In the middle of 2017 the market breaks the trend resistance from the drop, starting a new sideways consolidation structure. The pattern appears to be an expanding wedge with the market lifting from the bottom support at the beginning of March this year.
On daily chart (right) we can see a closer look at recent movements: the start of this year has the market drop quickly from $13.50 to $10.25 (-24%), find support at the bottom of the pattern, retest and bounce. The current consolidation had the market break the larger weekly channel from 2014, drop back in, and is now sitting back at the channels s/r.
Overall we are watching the consolidation wedge pattern to see how it continues to develop. The daily chart shows potential opportunities within the pattern: dashed orange highlights significant technicals that if broken could see a move back to one of the wedge patterns bounding s/r's. Otherwise a break up out of the wedge (for a potential reversal of the larger trend), or a drop down through the consolidations supports (possible continuation of larger trend down) are the next significant technical opportunities (highlighted in solid orange).
Initial Chart Supporting Above Analysis:
THE BREAKING NEWS STORY:
Ford stock gets knocked down 5%, among the worst in the S&P 500
Ford’s preliminary 2018 earnings fall short
Shares of Ford Motor Co. were among the worst on the S&P 500 index on Wednesday after the car maker kept Wall Street in the dark about its expectations for this year and reported disappointing preliminary 2018 earnings.
Ford F, +0.84% stock fell more than 5% to trade as low as $8.30 in midday trading, on track for its worst one-day decline since late July. It was the third worst performer on the broader stock index.
It pinned the shortcoming on commodity costs, unfavorable foreign exchange, policy changes and a decline in China business, among other factors.
Analysts zeroed in on Ford’s lack of clarity regarding the 2019 outlook. Ford has been repeatedly faulted for being thin on the details of its ongoing cost-cutting plans.
“Investor patience is likely to be further tested today as Ford has basically once again said ‘your guess’ to the financial community with respect to specific financial guidance (this time being it’s 2019 outlook),” analysts at ISI Evercore said in a note Wednesday.
“Ford has been a whole lot of talk and not too much concrete action compared to (General Motors Co. GM, +1.57% ) which continues to execute and move at new vs old Auto speed,” said the analysts, led by Chris McNally.
While there is “potential for improvement” this year, including a boost from new-vehicle introductions and revamps, headwinds for Ford include continued high commodity prices, exchange rates, and higher U.S. interest rates and effective tax rates, the analysts said.
The ISI Evercore analysts forecast lower vehicle volume for Ford in the U.S. around the low 17 million compared with nearly 18 million in 2018, and called for a flat vehicle volume in Europe, a small decrease for China’s volume from about 26 million last year, and flat vehicle volume globally.
Ford stock has lost 36% in the last 12 months, and is down around the same from its 52-week high of $12.18 hit on Jan. 17, 2018. The 12-month performance compares with losses of 6% and 6.2% for the S&P 500 index SPX, +0.76% and the Dow Jones Industrial Average. DJIA, +0.67%