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Ford charts a path forward

Ford charts a path forward

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Monday marks the last day of Alan Mulally’s tenure as CEO of Ford. Investors are now hoping his successor, Mark Fields, will be able to build on Mulally’s accomplishments.

Shares of Ford doubled since Mulally took over seven years ago. During that time, the company weathered the financial crisis and was the only carmaker not to need a federal government bailout in 2009.

“Mulally has certainly left Ford in an excellent position,” said Gina Sanchez, founder of Chantico Global. “If you look at where he took over Ford, with a $30 billion loss from 2006 to 2008, and where it has been for the last five years, with over $45 billion in gains in revenues, that’s incredible.”

Sanchez has confidence in Ford’s incoming CEO, Mark Fields. “Fields is really seen as an innovator,” said Sanchez, a CNBC contributor. “He was the COO, and he oversaw many product launches. I think his take is going to be that innovation is the key. That’s absolutely right, especially in an industry that is facing potential disruption from the likes of Tesla…. Ford could be headed in the right direction.”

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As Ford is about to go through a leadership change, the company’s stock may also be at a critical juncture. It all could hinge on whether it breaks above $18 per share, according to the charts of Richard Ross, global technical strategist at Auerbach Grayson.

“Ford's known as a great American brand,” said Ross, a “Talking Numbers” contributor. “But, going back to last October, it’s really been trading like an emerging market stock.”

Ross notes the stock had a 20 percent correction from its October 2013 peak of $18.02 per share to its February lows, similar in magnitude and timing to many emerging market stocks. For Ross’ charts, the $18 level is important because it serves as a key resistance level going back as far as 2002.

“You can see a very bullish base of support has been building for the last 13 years,” Ross said. “That’s a long time to wait for Ford investors, but good things come to those who wait. If we can take out that 200-week moving average which corresponds to the neckline of that pattern around that $18 level, you could see a lot of upside here in Ford. So, I do like the shares.”

That doesn’t mean Ross would rush in to buy shares in the auto giant just yet, however. “Yes, we’re up 20 percent off the lows, so I don’t know if I want to chase it in here,” said Ross, adding, “But, if it broke back above those old highs around $18, that would generate a very compelling buy signal.”

To see the full discussion on Ford, with Sanchez on the fundamentals and Ross on the technicals, watch the above video.

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