Signal Says Ferrari Stock Could Race Into New Year

Ferrari options are attractively priced at the moment

by Patrick Martin

Published on Nov 18, 2019 at 11:39 AM
Updated on Nov 18, 2019 at 12:18 PM

Italian carmaker Ferrari NV (NYSE:RACE) was unable to get a halo lift this morning from sector peer Ford's (F) big electric SUV announcement. At last check, RACE was down 1% to trade at $165.55, but the stock still flashing a bullish signal that could lead to new record highs. 

More specifically, RACE's recent Nov. 4 record high of $172.88 comes amid historically low implied volatility (IV) -- a combination that has been bullish for the stock in the past. According to data from Schaeffer's Senior Quantitative Analyst Rocky White, there have been eight other instances when Ferrari stock was trading within 2% of its 52-week high, while its Schaeffer's Volatility Index (SVI) sat in the 20th annual percentile or lower -- as it the case with RACE's current SVI of 20%, in the third annual percentile. 

The data shows that one month after those eight previous signals, RACE was up 5.3%. From its current perch, another move of that magnitude would put the stock above $174 for a new record high. The equity is up an impressive 66.5% in 2019, and this month's recent consolidation found a floor at the $165 level, an area that coincides with its 10-day moving average.

Daily Stock Chart RACE

A shift in analyst sentiment could also give RACE more room to run. Currently, around 38% of analysts in coverage rate Ferrari a tepid "hold," and the consensus 12-month price target of $172.87 is a slim 4% premium to its current perch.

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