Legacy autos with large debt and high interest rates will be highly susceptible in a recession. Ford is also losing billions in their attempted transition to EVs and will continue to do so for the foreseeable future. Technically, there is a massive head and shoulders with lower high after lower high on the right shoulder.
(Trade Idea)
Enter Short: $12.85.
Stop loss: $13.20.
PT: $4.52.
R/R: 1/23.8
Estimated hold time: 3-12 months.
Not financial advice.
(Trade Idea)
Enter Short: $12.85.
Stop loss: $13.20.
PT: $4.52.
R/R: 1/23.8
Estimated hold time: 3-12 months.
Not financial advice.
Comment:
Major legacy automotive weakness as the market rips is not good news for bulls. Your stop placement is so critical (came close to it but still in the game!)
Trade active:
Still full position short.
Since the last check-in Tesla missed their earnings.
News out today:
"Wells Fargo is laying off all junior Auto underwriting staff. As of 04/27 any auto loans greater than 110% loan-to-value and 15% payment-to-income will be declined."
Interest rates rising, credit is tightening, automotives will likely have worse margins on new car prices moving forward as the prices of new cars will be forced to go lower due to fewer qualified buyers.
Since the last check-in Tesla missed their earnings.
News out today:
"Wells Fargo is laying off all junior Auto underwriting staff. As of 04/27 any auto loans greater than 110% loan-to-value and 15% payment-to-income will be declined."
Interest rates rising, credit is tightening, automotives will likely have worse margins on new car prices moving forward as the prices of new cars will be forced to go lower due to fewer qualified buyers.
Comment:
I'll be adding to this short following a neckline breakdown and back-test flip of support to resistance. Will take some time for that to happen but this is a high conviction short