Ford
- Shares of Ford have staged an impressive rebound so far in 2021, surging 70% as it unveils its electrification plans.
- Meanwhile, shares of Tesla have moved in the opposite direction and are down 14% year-to-date.
- Technicals suggest that the outperformance of Ford relative to Tesla could continue.
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A two-year trend of Tesla outperforming Ford is beginning to reverse as investors focus on the electrification efforts of the 117 year-old automaker.
Year-to-date, shares of Ford have surged 70% as of Thursday afternoon, far outpacing Tesla's year-to-date decline of 14%. Ford has clearly taken a page out of Tesla's electric playbook, as it builds up anticipation among both investors and customers for its upcoming EVs.
Ford has jumped 14% since it unveiled its electric F-150 Lightning pickup truck earlier this week. The company said it is amping up its investments in electric vehicles and will target 40% of its vehicles sold to be electric by 2030.
Ford is feeling confident about its electric F-150 truck relative to Tesla's Cybertruck, based on a research note from JPMorgan. Ford's management team told the bank that its internal research showed customers "wanted a product that looked like a truck, not a science experiment," according to the note.
Ford's recent outperformance should be taken into perspective when you consider that over the past two years, shares of Tesla are up more than 1,500% while shares Ford are up only 49%. Tesla's rise had briefly made it more valuable than 9 biggest automakers combined.
But technicals suggest the recent trend of Ford outperforming Tesla can continue as it gets serious with its electrification efforts. Here's the technical setup of Ford relative to Tesla.
The chart below tracks the relative performance between Ford and Tesla. As the chart declines, it signifies that Ford is underperforming Tesla, and vice versa when it is on the rise. A bullish inverted head and shoulders pattern has developed in the relative ratio chart and a decisive breakout above neckline resistance has occurred.
An inverse head-and-shoulders pattern is a bottoming pattern that often signals a reversal following a bearish downtrend. The pattern takes its shape from a series of three bottoms, with the second bottom being the deepest.
A neckline represents resistance and is formed by connecting the three recovery peaks associated with the three bottoms. The recent break above the horizontal neckline sets Ford up for more upside ahead relative to Tesla.
On top of that, the chart is making a series of higher highs and higher lows, which is indicative of a new uptrend forming. The bullish technical outlook for Ford relative to Tesla does not mean Tesla can't move higher from here, but it does suggest that if Tesla does reverse its year-to-date decline and move higher, Ford will in tandem move higher at a faster clip.
Ford has a a lot of ground to make up ever since Tesla eclipsed it in market value back in 2019. Ford is currently worth about $51 billion, while Tesla's market value stands at $596 billion.