Ford stock plunges 7 percent on open after 4th quarter profits drop

After closing up in anticipation of a good annual report, Ford stock (NYSE: F) plunged on the open after a dismal 4th quarter profit report.
Advertisement


The chart shows a decline still in play after 20 minutes into the open. According to MarketWatch.com, if the decline holds it will mark its biggest one-day percentage drop since April 2009 when shares fell 7.7%.

This doesn’t means Ford is in trouble long term, as its stock had a great performance for 2010. Still, the market is a forward-looking mechanism.

It was only a few weeks ago that Ford stock was labeled as a growth story per Mad Money’s Jim Cramer at Dearborn Truck Plant. It will be interesting what he will say now.

Anyone who watches Cramer on a regular basis will likely hear him say to back up the truck and us the opportunity to buy more; but, we’ll know tonight.

For the record, the 2011 North American International Auto Show (NAIAS) in Detroit showed Ford with the largest display ever. Their car designs and technology are viewed as cutting edge.

Fact is, the market has agreed up to today that the fundamentals of Ford are strong. Furthermore, Ford Motor Company was slated by Jim Cramer to possibly double.

Again, when asked about the comparison between Ford and GM, he noted that “GM is a hopeful turnaround, but Ford is a growth story.”

Although, the bottoming tails prior implied a potential for an up surge, today’s price action confirms that buyers are exiting and looking for entries at lower levels. With emotions in play, it’s hard to tell how low Ford stock will go before those buyers come back in.

Disclosure: Frank Sherosky, creator of the chart and author of "Awaken Your Speculator Mind" does not hold any stock or option positions in this stock at this time.

-----------------------
About the Author: After 39 years in the auto industry as a design engineer, Frank Sherosky now trades stocks and writes articles, books and ebooks via authorfrank.com, but may be contacted here by email: [email protected]

________________________________________________
Additional Reading:

Stop-start technology especially challenging for micro-hybrid engineers
Honda stock a steady dream performer amid Toyota recalls
Stop-start technology to advance more micro hybrids by 2016


Sign-up to our email newsletter for daily perspectives on car design, trends, events and news, not found elsewhere.