Ferrari’s (NYSE:RACE) Stock Rally Not Over
Ferrari (NYSE:RACE) stock continued in consolidation mode last week, finishing at 110.74, +0.6% on the week.
The company’s stock has risen 90% YTD, falling about 3.% in September, after marking an all-time high a 118.10 on 6 September, but was turned back at the major resistance where profit taking happened.
Taking a look at some of the reasons, as follows:
After marking the high on 6 September, on 7 September, Morgan Stanley (NYSE:MS) downgraded its rating on Ferrari stock from “overweight” to “underweight” noting that a Morgan Stanley analyst was concerned about Ferrari’s valuation, which might have been the Key reason for the short lived sell off, it was simply profit taking and the Key support held and moved up solidly to 110.97/share, now a Fat Green Line, indicating that Morgan’s un-named analyst’s call was self serving to the House.
Note: Ferrari’s V12 engine car sales have risen over the last few Quarters, which boosted its profitability. In general, Ferrari’s profit margins from V12 engine cars are stronger than those from V8 engine cars.
Ferrari’s margins are better in the extreme Vs those of all automakers, including: Fiat Chrysler (NYSE:FCAU), Ford Motor (NYSE:F), and General Motors (NYSE:GM).
Technically I see no signs of reversal in Ferrari stock in here.
Its 1st support is very Strong at 110.97, and a clear break of its all-time high of 118.10 should attract fresh buying near term, driving the stock to 125.96 and higher.
Tune out the Noise.
|NYSE:RACE||113.49||19 September 2017||1.16||112.91||113.94||112.75||530,300|
|HeffX-LTN Analysis for RACE:||Overall||Short||Intermediate||Long|
|Bullish (0.39)||Neutral (0.22)||Very Bullish (0.52)||Bullish (0.42)|