Elliott Wave Says Ford Motor Is About To Tank
EWM Interactive | Aug 30, 2016 11:10AM ET
Ford Motor Company (NYSE:F) shareholders were among the most miserable market participants during the crash of 2007-2009, when the stock plummeted to slightly above a dollar a share in November 2008. Fortunately, the company managed to survive and in January 2011 it was trading close to the 19-dollar mark. The problem is that Ford has been going nowhere but south ever since and, while near $12.50, the Elliott Wave Principle suggests it might fall even more, before it is worth buying again.
The theory states the direction of the trend may be recognized by spotting a five-wave sequence, called an impulse. The rally from $1 to $19 between November 2008 and January 2011 could be seen as such. But every impulse is followed by a three-wave correction in the opposite direction, before the larger trend resumes. That is what we believe has been in progress since 2011 – an (a)-(b)-(c) zig-zag correction. Wave (a) is another impulsive pattern, followed by a deep wave (b). Wave (c) does not look like an impulse so far, so we could expect it to develop as an ending diagonal.
If this count is correct, Ford stock might lose more than 30% of its value moving forward because the bears seem to be aiming at the 61.8% Fibonacci level, which, in terms of price, means levels around 8 dollars a share. In our opinion, that's the area where Ford would be worth the buy because once the retracement is over, the uptrend should resume.
Patience is key.
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