Ford F Flags Down to the Lows in Bearish Breakout

Jul 26, 2017: 9:22 AM CST

If you’re a big fan of technical analysis and bear flags like I am, you’ll love Ford (F) right now.

We’re seeing price in a downtrend rally toward a critical resistance pivot in a Bear Flag… and then break (collapse?) beneath the trendline this morning after falling from the resistance pivot.

It’s a great lesson and perhaps a better trade set-up right now.  Here it is:

Ford Bear Flag Breakdown

On a separate lesson, a Symmetrical Triangle developed in early 2017.

Note how volume declined as the pattern formed – that’s a textbook pattern example.

Price ejected beneath the lower trendline, setting up a Breakout Trade that was wildly profitable for bears/short-sellers.

In May after price completed a sharp liquidation phase, buyers stepped up their game, bouncing price higher up away from the $10.00 per share level on a persistent positive momentum divergence.

Green volume and momentum surged on the initial breakout , but look what happened next.Momentum and Volume both declined – diverged negatively – as price rallied up toward the underside of the falling 200 day SMA (red line).

This critical “Make or Break” pivot was an excellent aggressive short-sale trade set-up – a retracement.

See our “Perfect Pullback/Retracement” Lesson Bundle for specifics on recognizing and trading this excellent opportunity.

From there, price collapsed toward the lower rising trendline (initial swing trade target) beneath $11.50… and today we see a bearish breakout beneath the rising (lower) trendline, triggering a breakout entry.

Watch price on the current departure from the $11.25 pivot.  Stops are placed back inside the pattern near $11.25 (which makes it the critical pivot at the moment).



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Corey Rosenbloom, CMT

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