February 10, 2010
Shares of Ford Motor Co (NYSE: F) reached their highs, at just above $12.00 on January 11. Since that date they have made a series of lower highs on each rally attempt.
On the downside, shares have stopped at about $10.40 a share on each sell off.
If you draw a line through the declining highs and also through the two sell off bottoms, you get a pennant formation with a declining trend resistance line and a horizontal trend support line.
On of these lines will be broken in coming days and usually, the direction of the break will forecast the direction of share prices over the coming weeks and possibly months.
Traders should be watching for a close either above $11.40 as a potential breakout leading to a rally, or below about $10.40 as a potential break to the downside leading to further losses.
Disclosure: No position