Will Ford Take Investors on a Profitable Ride?

With shares of Ford (NYSE:F) trading around $12.48, is F an OUTPERFORM, a WAIT AND SEE, or a STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for a Stock’s Movement

What better way than believing in the American recovery than buying American? Ford is a poster child for the “Made in the USA” campaign. The company is doing an excellent job in piggy-backing on the American recovery trend. Also, Ford is picking-up ground against its international competitors, so look for F stock to pick up steam in the near future.

T = Technicals on the Stock Chart are Strong

From a low at the beginning of August of 2012, F stock is in an amazing uptrend consisting of higher highs and higher lows. This is the type of price action one would want to see in a stock because it simplifies trading or investing in it. It broke above last year’s highs near $13 but has recently pulled-back to that previous resistance and now support level, keeping the uptrend intact.

Ford is currently trading above it’s key 100-day and 200-day simple moving averages but is battling it out near the 20-day and 50-day moving averages. A good thing to note is that the 50-day, 100-day, and 200-day moving averages are upward sloping, a good indicator of an uptrend. Look for continued consolidation near the 20-day and 50-day moving averages.

The options market in F is showing a bright spot. Today, call volume is up over 30 percent relative to its average. In specific, there has been a large accumulation of January 2015 20 strike calls near the ask, signaling a buyer. With that action, this buyer believes the stock will scream higher in the next 2 years…