From a car wreck of a F stock to putting the pedal to the metal, the Roaring ’20s reinvented hasn’t been your granddad’s Ford Motor Co. (NYSE:F). Today, let’s look under the hood to determine what F stock’s next move might be and how to drive F shares for big-time, risk-adjusted profits.
Tesla (NASDAQ:TSLA). ChargePoint (NYSE:CHPT). QuantumScape (NYSE:QS). Lucid Motors (NASDAQ:LCID). Nio (NYSE:NIO). They’re top companies among the throngs of diverse, pure-play EV stocks.
But you knew that already.
Also and not exactly a secret, most of them have made painful U-turns from nothing but blue-skies behavior into unseasonably miserable bearish cycles. Given their popularity, there’s also a strong chance you’re intimately aware of those stinging price recalibrations.
F Stock Is Festive?
Yet not every EV stock looks like the aftermath of an overly festive Christmas party. There is a not-too-small company by the name of Ford.
And today, rather than F stock’s investors pointing blameful fingers at worrisome higher consumer interest rates, fretting supply chain issues or even a new wave of stay-at-home, out-of-the-car challenges, Ford has motored higher.
The F shares your granddad may have gifted for your 5th birthday or as a Christmas stocking stuffer long ago are up nearly 5% in December and just off record highs hit this month.
But it’s more than just a Santa Clause rally that Ford investors are enjoying. Shares are also up nearly 130% in 2021. Yup, stodgy ol’ F stock.
Good Cause
So, what gives?
This century’s version of a new go-go Roaring ’20s era has quickly unraveled for most EV stocks. And given the current more demanding, tire-kicking sentiment, it’s not without cause.
Bottom line, most EV stocks are either mired in red ink, own fairly ridiculous price multiples or both. The thing is they’re mostly growth narratives still needing to show the world what they’re capable of.
At the same time, Ford has been driving laps successfully around the block and around the globe for that matter, for some time now.
F stock’s best-selling vehicles are everywhere and popular as ever. And it’s entry into the EV market is off to the kind of start that’s all but guaranteeing its success there too.
Demand for Ford’s electric Mustang Mach-E has been so brisk the company is set to triple production to 300,000 units for its North American and European markets by the end of next year.
And those pick-up trucks known the world over? Ford’s new F-150 Lightning electric truck is fully booked in front of a production rollout next spring. Yup, inside the next few months.
All told and in a market environment that’s switched gears into value stocks while steering clear of riskier high-multiple and future “ifs” narratives, F stock is at the enviable intersection of both worlds.
F Stock Weekly Price Chart
Source: Charts by TradingView
Have you driven a Ford lately? Judging by the illustrated monthly view of F stock, bullish investors certainly have.
Since the start of this decade’s ode to the fabulous and giddy Roaring ’20s, shares of Ford have rallied more than 400% off their March 2020 bottom.
The bad news, if any, is the price behavior has become increasingly driven to the point where F stock is a momentum play. Of all things, right?
And what goes up, especially when the rate of ascent is fast and furious, will invariably come home to ruse in the form of a larger corrective cycle. As already noted, many EV investors are keenly aware of just that.
Still, Ford’s monthly stochastics indicator has just bullishly crossed over in overbought territory. And optimistically, the technical turn may have enough torque to help rally shares into a Fib-based, two-step pattern completion near $24.50.
On the other hand, that inevitable day of reckoning or rather a period of weeks when shares retreat by a common 15% to perhaps 20% for a stock of Ford’s caliber, needs to be appreciated.
More to the point, with F stock forming a monthly doji stationed on top of its all-time-high from 1999 midway through December, a challenge of $17 or even lower in a less bullish market, may not be too far off.
So what’s a Ford investor to do?
If you want the best of both worlds in a Ford stock where value is intersecting growth, but don’t want to wind up as a crash test dummy, a fully-hedged and actively-managed F stock collar position can help investors navigate risk, both off and on the price chart, with greater authority.
On the date of publication, Chris Tyler holds hedged long positions (either directly or indirectly) in Ford Motor Co. (F). The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.
