Confluence- Ford Motor Co. (F)

I've been listening to Tom O'Brien for several months now and have learned quite a bit. He uses, among other things, the idea of confluence throughout his technical analysis of charts. He defines it as "the price range sandwiched between the 0.382 retracement level of a trend and the 0.618 retracement of a related subtrend; confluence reveals powerful support and resistance level."

The method is used to find entry points and help establish stop loss levels. I'll use an example of a stock that I have wanted to short for a long time but didn't have the right entry point. Ford Motor Co. (F) is dying and I would like to make some cash on that fact.

First, I need to set up the trend and subtrends. I chose to look at the long term downtrend of Ford. The analysis of the weekly chart revealed confluence to be at 7.88 and 7.66. (A1 = 10.87, A2 = 8.67, and Focus = 6.02) As it can be seen, the price already broke through confluence on high volume. However, three week ago, Ford took a nose-dive on huge volume and began an ABC down pattern.

Now, lets examine the shorter term chart. Ford established a new uptrend with a powerful ABC up that busted right through the downtrend confluence points. Ford then fell off the highs on big volume and then made another leg up to finalize a double-top pattern. Now Ford is in the midst of an ABC down, coming off the second high of the double-top on massive volume. This time, slicing right through the newly established uptrend confluence points (green lines). I expect that Ford will rise up to the C point in the ABC down and then continue down. The C point will most likely be between the long term down trend confluence points of 7.88 and 7.66 (red lines).