Investors who failed to take advantage of the inflow of electric vehicle stories lifting Ford (NYSE:F) missed the exit. After peaking at $16.45, F stock closed at below $14 last week.
The selling is so fierce that the stock is below key moving averages. It broke through the 50-day moving average last week. The 200-day moving average is above $11.00, the next support zone.
Ford’s weak technical chart aligns to fundamental troubles ahead. On July 16, the company issued a massive recall. Ford recalled 775,000 Ford Explorers produced in 2013-17, due to cross-axis ball joint defects. This is due to six allegations of injuries. Fortunately, none of the owners faced injuries. The recall is not as serious as the GM (GM) ignition switch, which caused death.
Fortunately, for its investors, GM (NYSE:GM) stock bounced back sharply from the dark days of 2014.
Ford’s valuations may look attractive as does its pivot to EV. The chip shortage will limit EV sales, thereby hurting the revenue expansion potential. Investors are better off buying Tesla (NASDAQ:TSLA) stock instead. TSLA no longer has short-sellers betting against the stock at a 4.4% short float.
The EV giant is the leader in the field. It will take more than low prices and the Mustang EV branding for Ford to ever catch up.
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