Are surging Ferrari shares still in pole position?
Shares in the Prancing Horse are trading at record highs. What if it actually starts winning races!
2nd July 2019 09:00
by Alistair Strang from Trends and Targets
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Shares in the Prancing Horse are trading at record highs. What if it actually starts winning races!
Ferrari (NYSE:RACE)
Last time we reviewed Ferrari (NYSE:RACE), we speculated on the price reaching $160, along with an argument in favour of the marque proving supreme in Formula One this year. From our perspective, we got the important question right, but their World Championship chances look dodgy.
Ferrari's share price in New York has achieved an all-time high, exceeding our $160 and now trading at record levels.
The next phase of a "safe" price climb shall come, if it trades beyond 165 dollars. Recent days brought highs of $163.7, close to our $165 trigger level but still not exceeding it.
Perhaps if Ferrari get a thrashing at their next outing to the British Grand Prix, we shall see the share soar higher again.
The important thing, if $165 bettered, is we're showing the potential of $188 making an appearance, a point at which we'd normally anticipate some turbulence.
If $188 exceeded, the price could easily accelerate to $193 (okay, both targets are essentially the same) but we really will expect some reversals - perhaps short term - to take hold at these levels.
Given the share prices form this year, the worst thing which could happen will be Ferrari starting to win races, just in case the converse of price growth appears!
In such an instance, the share requires close a session below the red line on the chart, presently at 148 dollars.
A disaster like this is liable to promote a visit to $140 with little chance of a successful complaint to the stewards. A larger, more painful, issue arises if $140 breaks as "bottom" should prove to be 121 dollars.
Unusually, we've painted the red uptrend against Ferrari's daily share price closing level.
Most of the time, we regard this as foolish but there's little doubt the real uptrend is being defined by the the point at which the share closes each day and not the low of the day.
This is quite important but makes us question price moves at the beginning of May. Often, this sort of trend break serves as early warning, almost like 'proof' the trend is not sacrosanct and can be broken.
Source: Trends and Targets Past performance is not a guide to future performance
Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.
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