Ford Motor Company (NYSE:F) spent yet another absolutely flat session in the narrow range of $15.70-$16.10. The price has not moved beyond this range for the last 4 weeks, suggesting a collapse in the volatility. Whenever the range is resolved, the expansion of volatility may produce some very interesting and trending moves. The failure of the first quarter result to break the range can be taken as a good pointer in this case.
The profitability of Ford Motor Company (NYSE:F) was hurt by falling European and South American sales, coupled with the big decline seen in the sale of its popular F-150 pickup truck in US. The net income reported by the company came at $924 million, down by 6.6% from the same quarter last year. The EPS declined to $0.23 from the earlier $0.25, and the consensus of $0.27 and the revenue came down to $31.8 billion against the $33.9 billion of the same quarter in the previous year. The consensus figure for the revenue was $33.92, almost flat.
In spite of this performance, the company expects 2015 to be a breakthrough year. The company estimates the full year’s pretax profits to rise from $6.3 billion in 2014 to between $8.5 billion to $9 billion this year. The market is still waiting for the turnaround signal the company is talking about.
Technically, the price has been in a contracting phase for the last 1 year, with the upper boundary coming at $16.50 and the lower boundary at $15.30. In the immediate term, the price must break beyond the range of $15.70-$16.10 for any significant move. It would be difficult to take any particular side at this point of time, though the bears may have a slight advantage. Investors may better wait for a while and take an entry in the direction of the range resolution.
