Benzinga
Published May 27, 2022 15:30
Updated May 27, 2022 16:10
Can Ford Reverse Course Into This Trend? Here's What The Bulls Need To Accomplish
Ford Motor Co (NYSE: NYSE:F) gapped up slightly higher to start the trading day on Friday, in tandem with the general market that saw the S&P 500 rising over 1%.
The automaker has soared about 10% over the last three trading days, possibly in reaction to a double bottom pattern the stock formed on the daily chart.
A double bottom pattern is a reversal indicator that shows a stock has dropped to a key support level, rebounded, back tested the level as support and is likely to rebound again. It's possible the stock may retest the level as support again creating a triple bottom or even quadruple bottom pattern.
The formation is always identified after a security has dropped in price and is at the bottom of a downtrend whereas a bearish double top pattern is always found in an uptrend. A spike in volume confirms the double bottom pattern was recognized and subsequent increasing volume may indicate the stock will reverse into an uptrend.
The Ford Chart: Ford created a double bottom pattern on May 12 and May 20 near the $12.15 level and on May 24 and May 25, the stock came near to that area again and bounced, causing the stock to soar higher. The price action near the $12.30 mark on May 24 and May 25 caused the stock to print a higher low, which may indicate a trend change is on the horizon.
See Also: How to Read Candlestick Charts for Beginners
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