Stock of the day: Ferrari

The new week starts with this analysis on Ferrari, which we previously mentioned at the end of July. Back then, the price was around 179 EUR and we were optimistic about this asset. The main reason was the bullish breakout from the symmetric triangle pattern. This is how we concluded that previous analysis:

“If you are a conservative trader and want to be extra sure about the direction, then you can wait for the price to break the 182 EUR resistance first before buying. If not, the breakout from the triangle should be fine by itself. Nevertheless, the positive sentiment is ON and patience has been rewarded again.”

So, how did that work out for us? We’re now a few months later and more than 50 EUR higher! The real Eldorado for Ferrari started in October when the price broke a horizontal resistance on the 192 EUR and the upper line of the channel-up pattern (upper blue). Usually, that’s a signal of enormous strength and that’s exactly what it is this time too.

On the chart currently, you can see a scary head and shoulders pattern (yellow). This can bring a bearish correction but doesn’t have to as we’re still above the neckline of this pattern (red). As long as we’re above, the sentiment remains positive but the price breaking the red line of this formation will bring us a proper sell signal.