Ford (F) is another stock where head and heart might be in conflict. A blue chip stock with a long history and a household name, yet the share price continues to wallow in single figures, although one could argue this is a significant improvement on the $1.01 price of 2009. Once again the monthly chart provides the macro perspective and the weekly chart the ‘micro’.
Starting with the monthly chart, the initial buying by the market makers was evident in October last year with ultra high volume on the hammer candle – a clear sign of stopping volume and the initial signal of market maker intent. This was followed in December and January with a two bar reversal on further buying, with the rally then developing with the wide spread up candle on excellent volume of April injecting some much needed momentum. The key here was the breach of the strong ceiling of resistance at $9.50 per share and denoted with the blue dashed line of the Quantumtrading accumulation and distribution indicator. The importance of this level (which is now support) can clearly be seen in the following months, with two tests, one in May and another in June, with the level holding firm on both occasions. Note the trend monitor indicator is transitioning to dark red, and a sign the bearish trend is weakening further. The key levels on this chart are now immediately ahead as we are entering a low volume node on the volume point of control, and hence a region which presents little in the way of a meaningful barrier from a volume perspective, and one which should therefore be cleared with ease and take Ford up towards $11 per share – not a huge advance, but progress nevertheless! From there towards $12.50 may well be a struggle, as we have deeper volume on the VPOC histogram coupled with some minor price based resistance at $11 and $11.75 per share and denoted with the red and blue dashed lines of the accumulation and distribution indicator. The good news is these are thin, and therefore relatively weak. And of course, if and when we reach the yellow dashed line of the VPOC itself, expect to see extended congestion develop at this level.
And so to the weekly chart which is perhaps more helpful. Here we see the trend monitor has already transitioned to a bullish condition, as we move firmly away from the volume point of control which sits at a lower level at $8.50 per share. For this week and next, we are looking at two levels. First, that of $10.55 per share where a strong ceiling of resistance is building and denoted with the blue dashed line, and once this is taken out, a second at $11.50 per share and denoted with the red dashed line. So if the recent trend of gently rising volume and price is to continue, the first of these needs to be breached and once taken out, volume on the VPOC histogram begins to decline gradually helping which should help to further advance the stock.
By Anna Coulling
Charts from NinjaTrader and indicators from Quantum Trading
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