It’s no secret, Ford Motor Company (NYSE:F) has been choking shareholders for a while now. But for contrarian investors, a toxic situation off the chart combined with a less lethal technical situation in Ford stock suggests the time is right for a bullish modified fence strategy using the F options market.
Possible carbon monoxide issues are no laughing matter and it’s one Ford has been dealing with in recent weeks. I’m certainly not telling readers anything new. Unsurprisingly, the company’s problem with police SUVs in Austin, Texas, has been front page news over this period, much to chagrin of Ford.
And the situation could get worse. There are lingering concerns of whether thousands of other Ford Explorers also on the road are at risk of exhaust fumes seeping into those vehicles and putting passengers in harm’s way.
The good news is that despite the seriousness for consumers, as well as its impact on Ford stock’s bottom line and potential brand credibility, investors aren’t buying it, but nor are they really selling into it either.
That’s not to say it’s blue skies ahead for F stock. Longer-term though, this problem is most likely a bump in the road for Ford.
It’s our guess investors are not only aware of this, but also appreciative of big-picture growth opportunities like the autonomous auto revolution, as well as those on the Ford stock chart.
Ford Stock Monthly Chart
The monthly chart of Ford stock emphasizes an out-of-favor name over the past couple years that has fully removed itself from the champagne and caviar celebrations of the broader market. The good news is that, without being overly optimistic, cycles like Ford’s do eventually shift gears and reverse. That, of course, would mean higher prices in F shares and a bullish trend will eventually emerge.
Backing this view, shares of F have essentially been parked in neutral since the August 2015 flash crash low which bottomed just above the 50% support level. In conjunction with an oversold crossover signal from Ford stock’s stochastics indicator, it’s this strategist’s contention Ford’s own little bear market of the past three years is gearing up to motor higher from its current idling behavior.