When the legacy-turning-electric vehicle manufacturer printed its first-quarter results on May 1, the stock shot up 2.4% at one point the following day but closed that session flat.
For the first quarter, the company printed EPS of 63 cents, which beat the consensus estimate of 41 cents. Ford also beat on the top line, reporting revenues of $41.5 billion compared to the $36.03-billion estimate.
For the second quarter, analysts expect Ford to report an EPS of 55 cents on revenues of $40.38 billion.
On July 12, Citigroup analyst Itay Michaeli maintained a Buy rating on Ford and raised the price target from $16 to $17.
From a technical analysis standpoint, Ford’s stock looks headed lower following the earnings print, trading in a downtrend and working to print a shooting star candlestick.
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 the extra risk because the institutions writing the options increase premiums to account for implied volatility.
The Ford Chart: Ford started trading in a downtrend on July 12, when the stock formed a bearish triple top pattern at the $15.42 mark when paired with similar price action on July 3 and July 5. On Thursday, Ford was looking to print a shooting star candlestick, which can indicate the local top has occurred and lower prices are on the horizon.
- Ford’s most recent confirmed lower high was formed on July 19 at $14.26 and the most recent lower low was printed at the $13.52 mark on Wednesday. If Ford suffers a bearish reaction to its earnings print, Thursday’s high-of-day will serve as the next lower high within that pattern.
- Bearish traders want to see Ford receive a bullish reaction to the news and then for big bullish volume to come in and drive Ford up toward $14.30, which would negate the downtrend.
- Ford has resistance above at $14.34 and at $15.42 and support below at $13.55 and at $12.79.
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