Tesla Motors Inc (NASDAQ:TSLA) Vs Ford Motors (NYSE:F) Technical Analysis
Ford Motor (F) Chart Review – Monthly Chart
Ford like many of the auto manufacturers in the US was able to take advantage of the surge in demand for new cars in the US. Looking at the longer term chart below you can see the strong run up from 2012 as it climbed from the low $9 price, all the way to the mid $17’s a share in just over a year.
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Since reaching the $17.40 – 17.50 level on 2 different occasions, the stock struggled to move higher and started to move down for the next 2+ years to form a new downtrend.
December 2016 appears to kind to Ford this year as the stock is performing strongly as it follows the overall strong performance of both the DOW (Ford is a Dow component) and the S&P 500.
We are approaching the mid-point of the month and if Ford stays at the current level or higher for the rest of the month Ford will have reversed its long term downtrend with a breakout to the upside.
Since it’s still early in the month we can’t review volume to see if the rally is supported, however momentum has been rising for several months making higher lows and higher highs supporting the move higher.
The $11.75 support level has held up well over the last 2 years as the stock respected the level and bounced higher.
Looking at the moving averages the 50 month moving average is comfortably above the 100 month moving average. This indicates support for the longer term trend. In addition the current price is sitting above the 100 month moving average.
Ford has on a few occasions over the last few years made an attempt to reverse its downtrend on the month chart, only to fail and reverse and fall back within trend. It’s ideal to wait for at or close to the end of the month for confirmation of the reversal of the down trend.
A close above the declining trend line and the current resistance of $13.85 would a very bullish sign for the stock going forward. This is a likely possibility given the bullish indicators present on the monthly chart and several weeks to go to the end of the month.
Ford – Weekly Chart
The medium term outlook with the weekly chart for Ford shows a less bullish picture overall, with the share price still conforming within the downtrend line on the weekly chart.
I have noted on the chart at least 2 prior attempts to close above the down trend line which quickly failed. With the chart showing the closing price from last week, the stock is currently sitting on the trend line, with the current week trading key for the direction of the stock.
The key bullish signs for the stock is that momentum is rising and is now positive at 1.06 on the weekly chart. I have not included in this chart but Volume has been above average supporting the strong rally of Ford over the last 3 weeks.
Similar to the monthly chart review, the weekly chart needs to close above the $13.85 resistance this week to confirm the reversal of the downtrend. Failure to close above this level could lead to the stock falling back down to support at $11.30, with this scenario unlikely to happen.
Tesla Motors (TSLA) Chart Review – Monthly Chart
The long term shareholders of Tesla have done extremely well, especially if you purchased the stock prior to 2012. At the end of 2012 year Tesla was trading around $34 a share and with the current price at $192.18 a share, shareholders have experienced a 460+% return over that period.
Loyal long term shareholders have been well rewarded, however the last 2 years have been more frustrating as the stock has been stuck in a sideways consolidation period.
The US stock index’s over the last few weeks have experienced a strong rally since the election in late November, however Tesla has not really participated in the bullish euphoria compared to the general market. Hence with Ford strong performance this month, Ford has been able to outperform Tesla recently which had been a rare occurrence.
The positive for Tesla is that for now the support level of $188 – $189 is well respected with every attempt to fall below that level quickly reversing.
The current price has for now continued to respect the 50 month moving average, with the current price beginning to bounce of this level. (See chart).
For Tesla to begin to recommence its longer term uptrend the stock would need to close above its resistance level of $270 level, to confirm the trend has reversed.
Potential Break Of Key Support
Since Tesla has failed to join the overall market rally, with the momentum on the monthly chart extremely weak as it makes lower lows and lower highs. There is a strong probability that Tesla will break its support level of $188 and make its way to the $127 level.
All it would take would be a negative company announcement from Tesla or a brief correction with the overall market to break its support level. For investors and traders interested in this stock make sure you watch the key support level.
Tesla Weekly Chart
The weekly chart offers no more hope for Tesla than the monthly chart did. Although Tesla finished last week up for the week, the stock looks vulnerable to breaking support at $185 and moving to the $141 level.
Since Mid August Tesla has failed to retest the $279 resistance level as it continues to generate lower highs to form the current downtrend on the chart. The stock may be able to move towards the downtrend line (see blue line) with the current market bullishness.
The longer term prospects though are bearish for the stock. Momentum is currently at -13.22 confirming the bearish outlook for the stock as momentum has been making lower highs and lows indicating no strength in the stock to move higher.
Watch The Support Levels
Similar to the monthly review the key support level to watch on the weekly chart is $185 a share, which is slightly lower than the monthly support of $189. Depending on your time frame that you utilize for stocks will determine which chart time frame is the most important for you to follow going forward.
Wildcard – FED Meeting
This week is the last FED meeting for 2016 and also the last time for the FED to decide whether it will raise rates. Currently the market is pricing in a 90%+ chance of a rate rise this week at the meeting. The last time rates rose in Dec 2015, it was followed by heavy volatility only a few weeks later. With US market highly elevated the FED’s meeting could provide the catalyst for the market to experience a minor correction.
Thanks for checking out my latest chart review on Ford Vs Tesla.
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Article by Guy Manno, Crush the Market