Ford Set-Up Has Risk, But Big Reward

08/25/2011 9:00 am EST

Focus: STOCKS

Now trading near support, shares of Ford Motor Co (F) are presenting a trade set-up that carries substantial risk, but also has a tight stop level and big upside potential.

Shares of Ford Motor Co (F) may have put in a tradable bottom near $10.00 a share.

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This level held declines back in June 2010 when intraday lows reached $9.75 a share and Ford closed at $9.88 a share.

Currently, Ford is testing those same lows with an intraday low at $9.81 and a closing low back on August 8 at $9.93. It has bounced off that level almost to the tick and held—at least for the past few trading sessions.

This is certainly a risky bullish trade, but the stop would be tight around $9.70 a share and the potential for gain is high with short-term resistance at $11.45 and long-term resistance at $16.00 a share.

By Frank Kollar of FibTimer.com

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