Ford Motor Company (NYSE: F) roared into pre-market trading on Wednesday after beating analyst expectations for both revenue and earnings in its Q4 2023 report. The impressive results, which included a 4% year-over-year revenue increase to $46 billion and EPS of $0.29 compared to the estimated $0.13, sent the stock price soaring over 6% to $12.82. This follows a strong 17% gain in the previous three quarters, showcasing investor confidence in Ford’s turnaround strategy.
However, beneath the rosy surface lie some challenges. Ford’s EV segment, Model E, continues to experience losses, which are expected to widen to $5-$5.5 billion this year due to pricing pressure and investments in new vehicle development. While the next generation of EVs promises profitability within the first year of launch, these concerns remain. Additionally, the broader market sentiment is cautious, with lingering uncertainties about inflation and the Fed’s monetary policy.
Technical
The 4-hour chart shows that Ford’s share is poised to open higher at around $12.83 following the release of the company’s Q4 earnings after the bell on Tuesday. The impressive quarterly performance sent the company’s share above the 50-SMA (blue line) and 200-SMA (orange line), indicating bullish momentum, but significant resistance could be found at the 100-SMA (orange line). RSI (52.82) is flat after breaking above the 50.00 level.
With the price action looking to open within a significant zone, the reaction of the market when trading opens could determine the trajectory of the price action in the near term. A sustained break above the zone would bring the 12th of July 2023 high of $15.43 into play. A break above the initial resistance on significant volume could confirm the bullish recovery, leaving the 16th of August 2022 high of $16.68 as the next likely level of significance in the short term.
However, rejection of the zone and a sustained push lower would leave the $11.28 support level, just above the supply zone, as the initial significant support lower. A successful bridge of the initial support and a sustained break below the zone could trigger a sell-off, with $9.63 and $8.43 acting as the next significant levels lower.
Summary
Ford’s positive Q4 earnings, focus on EV profitability, and dividend announcements have initially boosted its stock, but challenges remain. The technical analysis suggests a near-term critical juncture, a sustained break above the supply zone, could target the July 2023 high of $15.43, while rejection might lead to support testing at $11.28, with further downside potential to $9.63.
Sources: TradingView, Trading Economics, Dow Jones Newswire, Ford, Reuters.
Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
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