Ford Positioned to Gain Market Share

03/15/2011 7:01 am EST

Focus: STOCKS

Scott Redler

Chief Strategic Officer, T3 Trading Group

Shares of the American automaker may be gearing up for a bullish move, offering an exciting risk/reward opportunity for traders. Here's how one trader is looking to play it.

By Scott Redler of T3Live.com

With Toyota Motor Corporation (TM) under pressure alongside some other Japanese auto companies, common sense tells me to look at Ford Motor Company (F). The stock has pulled in from the $19 area and has been mired in a month-and-a-half long downtrend since its earnings report on January 28.

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I see a small descending channel on the daily chart that I think presents an outstanding risk/reward situation for the active trader. I think you could look to buy around $14.50, and if it holds above, we can get a quick cash flow move to around $15 before the ultimate gap fill back to $15.70. Stops would be at $14.20.

The stock also recently bounced in the area of the 200-day moving average, which bodes well for the price action.

By Scott Redler, trader, T3Live.com

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