Today's very postive earnings and revenue news on Ford (F) goosed the stock from around 7.00 to as high at 7.84 so far. Without diminishing either the report or the upside reaction, let's notice that today's upmove has not hurdled important resistance at the prior rally peak of 7.98.

Today's high places another coordinate along the resistance line from the August high, imbuing it with more power and significance. This has a double meaning: (1) if and when the 7.84-7.98 resistance area IS hurdled, Ford should continue sharply higher on its way above 8.86 to 9.50/70. And (2) until the resistance line is hurdled, all of the action since the August high (to present) is carving out a sideways coil (consolidation) formation that shoulld, when the coil is complete, resolve in thrust to the upside towards 9.50-9.70.

That said, within (2), let's understand that Ford can revisit the low 7.00 to 6.80 area prior to the anticipated upside breakout. Only a violation of Friday's low at 6.81 wil invalidate the bullish coil analysis. It is the with the foregoing in mind, tha I watch from the sidelines for a while longer to see how the price action navigates the coil pattern in the hours directly ahead.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.