See also 20 or so precious blogs. Here is today’s chart;

Ford had a beautiful diagonal 5th of 5 that took the stock to below $1 while at the same time almost guaranteeing that it would rise back to about $10. It did and then some, all the way to the 4th of previous degree ($18) and then some ($19). Since you cannot get much lower than <$1 it is reasonable to assume that a new bull market started from that point on. The move to $19 would then be wave 1 up. The 2 year decline from there would be wave 2. Waves 2 can  and often do retrace much of wave 1, but a reasonable first guess would be about 60% for starters, which is around $7.80. Looking at the details;

One more down move seems to be in the cards, how far is anyone’s guess but for the moment $7.80 seems just about right.

Ford is different from the others in that it is already in a new bull market without having gone into bankruptcy, even if it did trade below $1. We liked the stock then (see 21 previous blogs) but are not sure lately.

If this is a correction of the move from $1 to $19 it should take the form of a zig-zag, or a double zig-zag. One single zig-zag was complete at the $9 low, however the next move is an a-b-c again suggesting the trend is still down. If so the first leg of that second zig-zag may be complete. If so a rebound to , say, $12 is possible and then another leg (c) . The second zig-zag could end up being about 62% of the first. This is not similar to, but does rhyme with NAV and GM. The RSI and MACD suggest this might be a realistic possibility. In one of the previous blogs I calculated that $7.84 represented a 61.8% retracement of the entire move.By sheer coincidence that also happens to be where the lower neckline of a possible H&S formation runs, for whatever that is worth. When in doubt,only use other-peoples-money, not your own.

The H&S target would be around $4.

On the left the April outlook which was twice adjusted to events in the market. The last one that this was definitely a buy if you could get it under $9 (or thereabouts, of course). It got to $9.05 . On the right what actually has happened. The small c in the B-leg was expected to go to about $17, it only reached $16, but then the stock followed the script pretty well verbatim. What we have here is a wave 2 retracement of wave one up, retracing 50% (which is low for 2’s) and doing so in a 5-3-5 pattern. An alternative would suggest that the C wave is as yet incomplete. This alternative has little credibility considering that all other criteria have been met rather nicely. Wave 5 of C is most likely a wedge diagonal triangle adding certainty to the count. If this is indeed a new bull market the stock could go much higher, but in this dicey environment I would not expect too much soon.

This one could continue up to $16 easily. Before that there may be a wave 2 of 3 up that would interrupt the process. In the meantime the stock is up about 29% from the lows. There is talk that the company will reinstate it’s dividend at next weeks meeting (according to Barclays). It would supposedly be 8 cents a quarter, which, if I calculate it correctly is 32 cents per annum or at a stock price of $11.66 is a dividend of 2.75%, not bad.

Perfection would suggest that Ford could trade around $7.84 in order to retrace a precise 61.8%. But perfection in trading leads to frustration. The upside potential is such that anywhere under $9 this stock should be bought as opposed to our previous recommendation to sniff at it with a tight stop.