Thursday, April 29, 2010

Looks Like a Potential "Double Top" in Ford (F)

One of the stock stars of the past year has been Ford Motor (F). In fact, you could throw a dart into the auto sector space and make bundles of money, but Ford has name recognition among the masses, versus the supplier base. The company reported a very good quarter 2 days ago, and this has definitely been a "sell the news" reaction.

The stock might have formed a classic "double top" with mid March highs (bearish). Obviously it sits at the very important 50 day moving average. One would expect a cursory bounce here, but it will be interesting to see what happens after any such bounce.

I'll speak about this in another piece but one has to wonder as Ben Berananke's not stop easy money policies continue, when commodity inflation is going to begin to hit the bottom line of producers ... this was raised as a concern with Ford as they are benefiting from relatively low material costs versus the past few years. Lost in the (a) high gas prices and (b) loss of house ATM to fund purchase of cars was the fact the auto industry was demolished by high input costs. Aside from the obvious steel, "petrol" based products are found up and down the body - ask any chemical or plastic maker. We're beginning to see a repeat... [Mar 8, 2010: BHP Billiton Pushes Through 55% Price Increase in Coaking Coal Prices, Quarterly Pricing - Iron Ore Also Potentially Set to Soar]

No position

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