Ford Shares Surge 3.62% as Technical Indicators Signal Strong Bullish Momentum

Ford Motor (F) closed the most recent session with a 3.62% gain, pushing its price to $11.74. This sharp move suggests potential short-term bullish momentum, warranting a multi-faceted technical evaluation to assess trend strength, volatility, and potential reversals.

Candlestick Theory

Recent price action exhibits a bullish engulfing pattern on August 22, where the candle’s body fully encompasses the prior day’s range. This signals strong buying pressure, particularly as the price surged from $11.39 to $11.74. Key support levels are identified at $11.19 (August 21 close) and $10.95 (August 4 low), while resistance aligns with the recent high of $11.77. A breakdown below $11.19 may trigger a test of the $10.82 level (August 1 low), whereas a sustained close above $11.77 could target $11.93 (July 14 high).

Moving Average Theory

The 50-day moving average (currently ~$10.85) is above the 200-day MA (~$10.50), indicating a medium-term bullish bias. However, the 100-day MA (~$10.70) lags behind, suggesting a narrowing convergence between short- and long-term trends. The recent price action has consistently traded above the 50-day MA, reinforcing the uptrend, though a cross below this level could signal weakening momentum.

MACD & KDJ Indicators

The MACD histogram has turned positive, with the line crossing above the signal line (a golden cross), confirming a potential buy signal. The KDJ indicator (Stochastic) shows %K at 78 and %D at 65, nearing overbought territory. While this may indicate a short-term pullback risk, the divergence between MACD strength and KDJ overbought conditions suggests caution—overbought levels often precede corrections, especially if volume wanes.

Bollinger Bands

Volatility has expanded recently, with the upper band at $11.90 and the lower band at $10.80. The price currently sits near the upper band, suggesting stretched momentum. A retest of the lower band could offer a more favorable entry point, while a break above the upper band may validate a continuation of the rally.

Volume-Price Relationship

Trading volume surged on August 22 (58.5 million shares) during the 3.62% gain, validating the bullish breakout. However, volume has been mixed in prior sessions, with a 5.3% decline on August 18 (37.1 million shares) despite a 0.17% price increase. This inconsistency implies that while the recent move is supported, sustainability may depend on maintaining above-average volume in subsequent sessions.

Relative Strength Index (RSI)

The 14-period RSI stands at 62, indicating moderate bullish momentum but not yet overbought. A move above 70 would signal overbought conditions, increasing the likelihood of a near-term correction. Conversely, a drop below 50 could trigger a bearish signal, though given the current trend, a pullback to 45-50 might present a buying opportunity.

Fibonacci Retracement

Applying Fibonacci levels to the recent $10.02 (April 23 low) to $11.93 (July 14 high) swing, key retracement levels include 61.8% at $11.33 and 50% at $10.98. The price is currently testing the 61.8% level, which coincides with the August 21 close. A break above $11.33 could target $11.77 (78.6% retracement), while a failure to hold $11.33 may lead to a test of the 50% level.

Backtest Hypothesis

A strategy of entering long positions on MACD golden crosses and holding for five trading days yielded a 15.34% return, significantly underperforming the 32.99% benchmark. While the strategy avoided drawdowns (max drawdown = 0%), its Sharpe Ratio of 0.25 highlights suboptimal risk-adjusted returns. This suggests that while MACD signals can capture directional moves, they may lack precision in volatile environments like Ford’s recent rally, where volume and Fibonacci levels offer better confluence for entry timing.