F - stagnating as the economy weakens

With the market open, Ford (F) reacted to its Q3 earnings, the numbers certainly weren't terrible, but they were again indicative of the weakening economy. Ford stock closed 8% higher into the low $11s. Near term trend is bullish, especially with the close above the important 200 day MA @ 10.72


F, daily

Summary

Ford was a bright spot in a relatively muted market today. With earnings coming in broadly in line, the stock surged, no doubt part of the surge was a result of a short-stop cascade higher.

Ford 'Earns 1.63bn in Q3' story

Ford - key statistics

It should be noted, Ford has a remarkably low (forward) PE of just 7-8. Relative to the main market it is undervalued by at least 50%. Yet, such low PEs don't often mean 'its a bargain'. Miles driven by Americans are starting to look weak again, not least with gasoline prices pretty much set to stay over $4

The transportation index has indeed been weak since the start of the year, and the decline in Ford has been very much reflective of the weak tranny.
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From a price perspective, Ford looks set to climb for a few more days, the $12 level is a very old support level. Considering the main indexes, and broader economy, I don't believe Ford can hold over $12.

So, Ford is still very much profitable, but its in a sector that is especially vulnerable to any future consumer downturn. It will be one to keep an eye on in the days ahead, especially if it gets stuck around $11.75/12.00