Wednesday, January 2, 2013

F bombs...???



Ford has had a hell of a run recently.  Just a short while ago in mid December it was gesting $11 and now the stock is over $13. Look back into late October and the stock was just $10. So given the 20% gain over the past 2 weeks and 30% gain over the past 2 months, I view todays near doji as a blow off top.

Longs will be looking to lock in those tasty profits and I believe shorts will be all over the name on a high volume close below $13. If that occurs, look for a 38% - 50% retracement towards the $12 area where buyers will likely defend the name.

The stock has been in a bull market since the July/Aug lows so a short is definitely countertrend and not for the faint of heart. Given the recent strength, most people would be looking to enter from the long side so be nimble on a cover and use stops above according to your risk tolerance.

No comments:

Post a Comment