On the week that equity markets rolled over due to the coronavirus selloff, Ferrari shares were breaking out to highs. Unfortunately, the stock was also caught up in the selling.
On the plus side shares dropped just 29%, outperforming the broader market.
When an carmaker is outperforming the market at a time when investors were dumping stocks without discretion, that was very impressive.
It was also impressive to see the stock rallying Monday on what some declared bad news, meaning missing on earnings estimates and trimming guidance.
The Support is Strong at 183.43 and the resistance is light at 188.97. All of my Key indicators are Very Bullish, and not seeing any cluster overhead.
Meaning, Ferrari is going higher.
All this price action points to momentum for the Bulls.
On the Northside, let us see if the shares can get to the 123.6% Fibo extension, up at 192.04. Above that puts the 138.2% Fibo extension in play at 199.75 as well as the big round psych mark at 200.
On the Southside, investors may prefer to buy-the-dip.
This stock has been riding its 10-wk MA higher, without a real test over the past 12 wks.
I believe that a pullback into this mark will result in a buy-the-dip response from the Bulls provided the entire market is not melting down. A retest of the 4 May breakout at 158.53 if that happens will bring the same reaction
Our overall technical outlook is Bullish in here, as all Key indicators are Very Bullish.
Ferrari finished at 186.73, +1.22 Wednesday in NY, just shy of its intraday all time highs at 189.26 marked on 3 August 2020.
The Maranello Outfit’s shares were raised to Buy from Hold at HSBC.
Ferrari will continue to create value in the long term. Ferrari is a quality 1st long term luxury products investment, and I have called it at it at 200+/share long term, adjusting it to 200/share short term (after the virus) and siding with BAML to 230 long term for now. The stock is now considered defensive in the sector.
There is F1 racing this weekend, tune in.
Have a healthy day, Keep the Faith!
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