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Random Thoughts: Stocks Rocket on the ECB... But Will It Last?

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The path we take trumps the destination we arrive at.

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Ford? Tough!

There's a little bit of Peter Lynch in all of us; when we use, like, and enjoy a particular product, we intuitively believe in the brand, which, in a perfect world, makes us wanna own the stock. That dynamic arrived last week as I was behind the wheel of my new ride. I haven't owned a car in over a decade (living in NYC) and it was (cough) suggested to me that I get something practical.

I have an American flag in my front yard and it didn't feel quite right having a foreign car parked in my driveway. I swallowed hard and leased what I perceived to be a Mommy Wagon: The Ford Flex. Lemme tell you this - it is not a Mommy Wagon; I am very impressed with this car. As a matter of fact, I barely get to drive it anymore as my Jamie adopted it as her own (happy wife, happy life!).

The renaissance of American car manufacturers is in full swing; given today's "here, me, now" socionomic mindset, folks are hunkering down to take care of their own. When GM was toe-tagged in 2008, I took a long hard look at buying some Ford (F) and putting it away for a rainy day (the stock was changing hands for a buck and change). I didn't pull the trigger, but that was then and this is now.

Sure enough, when I pulled up the chart, I saw a (bearish) head & shoulders pattern. Ironically, doing the math, this chart, through a pure technical lens, works back to $1. (The "head" ($19) minus the shoulder ($10) equals $9; when subtracted from the right shoulder ($10), you arrive at $1.)

Obviously, I don't think that Ford trades back to a buck anytime soon but it was enough to quell my desire to get involved in the stock under $10. See the chart below, and remember that technical analysis is but one of our four primary metrics.


Click to enlarge
Position in QQQ.

Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at todd@minyanville.com.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.

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