Ford Stock (NYSE: F) jumped +10.05% to a six-year high of $15.99 after the automaker reported a 184% rise in EV sales for May.
Despite production disruptions caused by the ongoing semiconductor shortage, Ford reported an increase in sales last month.
U.S sales in May were 4.1% higher than April and +11.3% annually. SUV sales increased by 48% in the last 12 months, and Truck sales by 11.3% over the same period.
However, it was the sales growth of Ford’s electrical offerings that grabbed the market’s attention.
News that the legacy carmakers’ share of the EV market is increasing sent the Ford Stock price to its highest level since October 2015.
The daily chart shows that yesterday’s rally resulted in the price breaking out of an ascending channel.
This clearance of the trend line at $15.10 is a positive sign for the price. From a technical point of view, this breakout should lead to a test of the 2014 high at $18.12.
A previous cycle high in 2013 was $18.02. Therefore, this multi-year double top above $18.00 will be a huge resistance area.
Given the current optimistic outlook, the path of least resistance is certainly higher. However, the road ahead may have some potential speedbumps.
Yesterdays strong ADP data indicates Friday’s Non-Farm Payrolls will follow suit. The Fed has already announced plans to wind down its corporate credit facility and twinned with strong jobs data, will be under pressure to taper sooner rather than later.
Another potential spanner in the works is the strained computer-chip-supply chain.
Both of these factors have the potential to derail the current rally. On that basis, investors should remain cautious.
Should the Ford stock price trade back below $15.10, it would signal a false breakout and cancel the immediate bullish outlook.
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