This week of trading is marked by several key events and themes. The focus will be on the Federal Reserve’s decision on interest rates and its monetary policy outlook. Market participants will be looking for any indications of a shift in policy or a more cautious stance in response to recent turmoil in the banking sector. According to the CME Group’s FedWatch tool, there is a 73% chance of a quarter-point increase by the Fed. JPMorgan strategist Marko Kolanovic warns of a possible “Minsky moment” ahead as financial and geopolitical risks mount, adding to the cautious sentiment among investors. Overall, the sentiment for this week’s trading could be considered neutral as investors weigh both positive and negative factors. Additionally, the ongoing tensions between Russia and Ukraine will continue to be a factor for investors.
$F – Ford Motor Co.
Ford has announced a recall of 1.5 million vehicles due to two separate issues – windshield wipers that can break and brakes that can leak fluid. The recall includes 222,000 F-150 2021 vehicles and 1.2 million of its 2013 through 2018 Ford Fusions and Lincoln MKZs. These recalls highlight Ford’s ongoing quality issues, with the company recently stating that it will take at least two years to improve its quality to industry standards. Ford has also faced challenges with its F-150 Lightning and EV Mustang Mach-E, with production delays and pricing issues impacting sales. Despite these challenges, Ford’s CFO has revealed that its buyers have not significantly changed their financing habits, with longer-term loans representing only a small percentage of its portfolio.
- Ford’s stock price has been trading between $11.00 and $14.75 for over four months, making it suitable for both long and short trades within those levels.
- Ford is a good long-term stock with a dividend yield of 4.96%.
- Recently, Ford’s stock price squeezed downwards between the 50-day SMA and the 200-day SMA on the 4hr chart, pushing it towards its lower support level around $11.25/share.
- If the price falls through this support level, a short trade may be the best option.
- If the automotive industry keeps declining, Ford’s stock may reach approximately $9.00, which could present a buying opportunity.
- If the price bounces off the support level, it would need to surpass the 50-day and 200-day SMAs, leading to a potential move towards the next resistance level at around $15/share.
Shares Outstanding: 4.00B Share Float: 3.88B
$AAL – American Airlines
Analyst Scott Group at Wolfe Research upgraded his rating on American Airlines Group Inc from Underperform to Peer Perform, after the stock tumbled 14.9% over the previous six sessions. Despite the recent selloff, the stock remains heavily shorted with a 10% short interest. However, Scott believes the company will significantly reduce its debt this year given his expectation that free cash flow will exceed $2 billion in 2023. The stock has rallied 8.7% over the past three months.
- With a recent drop in AAL, current support level sits ~$14, it is yet to be seen how far this stock will go to bottom. Next support after this sits around $12/share.
- In the near term we see price stability within the $13.25-$14 range, which could provide much trading interest. In the longer term, one would be looking at the $11.50-$14 range, which harkens back to October 2022 lows.
- However, AAL may also create a newer channel within the $14-$16 range as it possibly may re-approach the 200 day SMA after falling through recently.
- Overall we are Neutral on this stock and advise to wait for further confirmation of a trend.
Shares Outstanding: 233.78M Share Float: 215.3M
$NFE – New Fortress Energy
New Fortress Energy missed revenue estimates in Q4 2022 due to LNG market volatility, generating $546.4 million, down 15.8% YoY. Adjusted earnings, however, improved to $0.87 per share, exceeding estimates by $0.33 per share. The company sold its Hilli floating liquefaction facility to Golar LNG for $100 million cash and 4.1 million shares. New Fortress Energy achieved its 2022 adjusted EBITDA goal of $1.1 billion and set a new goal of $2 billion for 2023. Despite Q4 setbacks, the company remains optimistic about LNG’s future and is investing heavily in building an integrated solution. New Fortress Energy Inc. also recently announced that its Puerto Rico subsidiaries have entered agreements with Weston Solution, Inc. for 150 MW of new power generation and natural gas supply at the Palo Seco Power Plant in Puerto Rico.
- NFE has been on a downward tear from its high of $60.06 in the last 6 months back in August 2022, with a small resurgence in November 2022, it has come down to a substantially low price of $26.57 recently.
- With the prolonged drop, current support is sitting right around the $27 range, however its next support sits at the $21.25 range. The next resistance levels may be seen at the $32 range and the $36 range.
- NFE has recently dropped to an oversold territory on its RSI data for 6+ months, from a technical standpoint it may very well be poised for a rise in the upcoming weeks and months.
- Traders may look into this stock as a swing trade for a few weeks to a few months and may find a return. However, with its continual drop, it is important to note that just back in 2019 it was a penny stock before surging to $62.90 (ATH) in the beginning of 2020. With this said, NFE has a major support line at the $20 range but has established a foothold for long term growth through its profitability.
Shares Outstanding: 208.76M Share Float: 97.43M
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