Trade of the Day: Ford Motor Company (F)

Downside momentum is picking up speed for Ford (F)

   

We’re opening a new bearish trade on Ford Motor Company (NYSE:F). Ford has recently broken below its trendline, which is promising from a bearish perspective and we think traders are likely to start selling before earnings are released on April 23. Ford is extremely sensitive to economic uncertainty in the eurozone so any negative news from that area could help accelerate the selling for Ford.

Italy and France both release their industrial production reports tomorrow. We are watching Italy’s report in particular, as the Italian markets are usually 75% positively correlated to the S&P.

Our near term target is $12 per share, which is fairly conservative in the short term. If bearish momentum picks up we think former support at $11 will be a more reasonable target before earnings.

Recommendation: Buy to open the F May 13 Puts (F130503P00013000) for a $12 target in the stock.

 

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John Jagerson and S. Wade Hansen are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news.  Get in on the next trade and get 1 free month today by clicking here.


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