Ford, Honda Stocks Face Speed Bumps Overhead

Ford and Honda stocks are nearing key Fibonacci retracement levels

Alex Eppstein
Apr 4, 2017 at 2:42 PM
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Auto stocks spun out yesterday, following weak March sales data -- with shares of Tesla Inc (NASDAQ:TSLA) being a notable exception. It's more of the same today, with the lion's share of automakers seeing red. Moreover, a closer look at Ford Motor Company (NYSE:F) and Honda Motor Co Ltd (ADR) (NYSE:HMC) reveals the stocks are in a precarious position on the charts.

Ford Stock Seeking a Foothold

F stock was last seen 0.6% lower at $11.38, and it's generally been an ugly year for the Detroit darling. Over the past 12 months, in fact, the shares have surrendered about 11% of their value, with the stock in a channel of lower highs and lows since 2014. Drilling deeper, Ford stock has breached the $12 region -- a 38.2% Fibonacci retracement of its 2008-11 rally. That said, the shares could still catch a foothold; the $11 area has been supportive dating back to early 2016.

f daily april 4b

If Ford Motor Company stock keeps sliding, its losses could be compounded by unwinding optimism among options traders. During the past two weeks at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), F shares have amassed a top-heavy call/put volume ratio of 2.37 -- just 19 percentage points from a 52-week peak.

Will Short Sellers Wake Up to Honda Stock?

HMC stock was last seen 1.7% lower at $29.62, on pace for its seventh straight loss. Despite recovering nicely from their 2016 lows, HMC shares were butting up against the $31 area -- a 50% Fibonacci retracement of their 2008-11 surge -- as recently as last month.

honda stock chart fibonacci retracement

HMC stock's best hope right now is its 200-day moving average, located just below at $29.42. This trendline served as a springboard as recently as November, and a breach could attract bears. Right now, less than 0.1% of Honda Motor Co Ltd's float is sold short.

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