Stock of the day: Ferrari

During the weekend, we received some potentially worrying information from the Ukraine-Russia border. It seemed that the opening of the market would not be too optimistic. I think the call between Macron – Putin changed that perception and gave a bit of hope, that is why, you can see a bit of relief on the charts right now.

I will open this new week with the analysis of Ferrari, which could use backup from the global sentiment as we are currently on a very important support. This support is the combination of a long-term up trendline (red) and the 191 (yellow), which was an important resistance in 2020 and 2021. We bounced off of it already last week but I guess that another bounce for a confirmation would hurt no bull.

By the way, you can see that drop here started at the end of 2021. If only you could be warned about such a possibility! Oh wait, you were. Check out our previous piece about Ferrari when we described the Head and Shoulders pattern:

“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.”

That was a sell signal indeed. Coming back to the present, price bouncing off of the yellow support will be a signal to buy and price closing a day below the yellow support, would be a signal to sell. It’s that simple.