Ferrari Stock Signal Flashes After Shares Touch New High

Ferrari speculators have been focused on put options

by Josh Selway

Published on Jun 11, 2019 at 1:54 PM

Few groups have benefited more from President Donald Trump's decision to not go through with tariffs on Mexico than automakers, and one stock from this sector that's been soaring is Ferrari N.V. (NYSE:RACE). In fact, the shares earlier hit an all-time high of $155.51, as they go for a sixth straight positive session. Looking closer, data from Schaeffer's Senior Quantitative Analyst Rocky White suggests more upside is ahead for the luxury car concern.

According to White, there have been seven other times in the stock's history when it was trading near its 52-week high and its Schaeffer's Volatility Index (SVI) ranked in the 20th annual percentile or lower -- as it does now. The current reading of 22% rank in just the 6th annual percentile. Following these other seven signals, the security has averaged a one-month gain of 4.4%.

ferrari stock chart june 11

Interestingly, options traders seem to be positioning for a move to the downside. For instance, the Schaeffer's put/call open interest ratio (SOIR) stands at 2.46. Not only does this show put open interest outweighing call open interest among contracts expiring within three months, but it ranks in the bearish 92nd annual percentile, showing such a preference for puts is rare. Peak open interest in the front-month June series resides at the 130-strike put.

Despite Ferrari stock's impressive run of the charts in 2019, the majority of covering analysts still have just "hold" recommendations. As such, there's a chance for pessimism to unwind on RACE shares, in and out of the options pits, which could create tailwinds.


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