The bull thesis for shares of automotive manufacturing giant Ford (NYSE:F) is pretty simple. Most people don’t like the stock. That means there’s a lot of negative news priced in. It also means there’s hardly any positive news priced in. Thus, if the news flow starts to switch in favor of Ford, this stock could roar higher.

Ford stock has done this before. Back in late October, a strong earnings report and some positive headlines pushed Ford stock up from $8 to nearly $10 — in a hurry.

Now, we are rapidly approaching those $8 levels again. At the same time, Deutsche Bank sounded a bullish tone on Ford stock in a recent note, slapping a $12 price target on the stock, while China auto tariffs are being peeled back.

Could things be shaping up for another near-term bounce in Ford stock? I think so, and that means Ford stock could turn into a strong near-term trading opportunity.

Near Term Risks Are Well Defined

The headwinds facing Ford stock are well known, well defined, and fully priced in.

The first major headwind is rising rates diluting big-ticket demand for items like houses and cars. This is already happening. Rates are projected to keep going higher. Auto sales are projected to keep falling. Thus, if Ford sales struggle over the next several quarters because of higher rates, that won’t be much of a surprise.

The second major headwind is the sharing economy eroding long-term auto demand. This is also already happening. Participation rates in the sharing economy are at all-time highs. Pretty much everyone expects the sharing economy to keep growing. Thus, if Ford’s sales growth is meager over the next several years because of falling auto demand, that won’t be much of a surprise either.

The third major headwind is EV competition like Tesla (NASDAQ:TSLA) stealing market share from Ford. Again, this is already happening. Tesla Model 3, Model S, and Model X vehicles are seeing huge sales growth this year. Ford’s vehicles are not. This is also expected to continue as the EV shift goes mainstream. Thus, if Ford continues to lose market share over the next several years, that won’t be much of a surprise.

The fourth major headwind is tariffs pushing costs higher and weighing on China demand. This, too, is already happening. Considering the lack of progress the U.S. and China have made on trade talks, there isn’t much optimism out there regarding a resolution. Thus, if Ford’s China sales remain weak due to trade war tensions, that won’t be much of a surprise.

In other words, all the risks and negatives here are well known and well defined. They are also fully priced in. Ford stock trades at just 6.5 times forward earnings. That is an exceptionally pessimistic multiple which reflects dour sentiment regarding go-forward growth prospects.

Good News Isn’t Priced In

When bad news is fully priced in, the flip-side of that is good news isn’t priced in — at all.

That’s exactly what you have with Ford stock. If any of those four aforementioned major headwinds clears up, Ford stock could take off. At just 6.5X forward earnings, any bit of good news could cause this stock to fly higher.

Right now, we are getting some positive news flow. The bullish note from Deutsche Bank regarding industry consolidation and corporate restructuring is a big boost for the stock. Also, China is taking steps to lower tariffs on U.S.-made vehicles from 40% to 15%. The outlook for rates to keep going higher in 2019 is less certain now than ever before, given slowing economic growth.

Broadly speaking, there are a handful of things which could go from negative to positive rather quickly over the next few weeks. If that happens, the anemic valuation of Ford stock supports a big rally.

Bottom Line on F Stock

The growth narrative at Ford is challenged, but the valuation on Ford stock fully reflects these challenges and, importantly, neglects any positive catalysts.

But you could get a string of marginally positive catalysts over the next few weeks. If those catalysts materialize, you could get a sizable recovery rally in Ford stock.

As of this writing, Luke Lango was long TSLA.