Tuesday, April 7, 2015

Chart analysis of Ford (F)

Here is a 2-year chart of Ford:

Now let's focus on the last 7 months:

Ford seems to have broken out of a textbook 5-point reversal symmetrical triangle in early February and has been trading in a tight range for 9 weeks. This range-bound action may lead to a breakout up or down. By the way, the measured move price target for the reversal symmetrical triangle is around 18, which is where long-term resistance holds.

And finally, a monthly chart going back to the 1990s:

This possibility may seem too incredible, but it is possible. Many things have to happen for this 15-year-plus H&S bottom to be realized. We should focus on possibly trading the next multi-week or multi-month pattern breakout. But it is always interesting and fun to think about what is possible in the big picture.

One reason why I keep this massive pattern possibility in mind is because it helps me fight my bearish bias for the market. The market has been on a historic run since the March 2009 bottom. Yet the market continues to go higher. Up and up. To my amazement. But I know that traders must accept and trade according to the actual price action and not what is "supposed to happen." We must always strive to stay mentally flexible and not succumb to our biases.

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