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Ferrari Wave Analysis – 18 November 2025 - Ferrari reversed from resistance zone - Likely to fall to support level 387.00 Ferrari recently reversed down from the resistance zone between the resistance level 427.00 (former monthly low from August), upper daily Bollinger Band and the 38.2% Fibonacci correction of the downward impulse c from October. The downward reversal from this resistance zone started the active short-term correction ii. Ferrari can be expected to fall further to the next support level 387.00 (former low of wave b from the end of October).
NYSE:RACEShort
by FxPro
1
Ferrari RACE Technicals Led Entry With 100% Upside in 2026 RACE is in a measured correction after its July 2025 ATH (~$517). A repeat of prior ~35% corrections (2018/19; 2022) implies a symmetry target near ~$336 (35% off $516), creating a high-quality “buy the pullback” setup for smart investors willing to scale in before fundamentals re-assert. With the current price around ~$400, a full 35% retrace would complete near the low-$330s; prior cycles then delivered outsized recoveries. We view the $330–$360 zone as a strategic accumulation area for 100%+ multi-year upside potential, with a 2026 bull target >$700 assuming backlog support, margin resilience, and successful new product execution. ATH/price data cross-checked from market sources. ________________________________________ Executive Summary • Thesis: Ferrari remains the purest “luxury-automotive as luxury-goods” equity: scarce supply, sold-out order book into 2026, rising personalization, and a carefully staged electrification roadmap supported by the new Maranello e-building. Even with macro or tariff noise, Ferrari’s brand, pricing power, and capital discipline underpin premium multiples. • Why now: The stock’s technical correction is doing the valuation work for you. Into weakness, we favor staged entries ahead of 2026 catalysts EV debut & deliveries; new model cadence; ongoing buybacks. • Key risks we underwrite: macro wealth shocks; execution on first BEV; regulatory/tariff volatility; FX EUR/USD; and luxury demand rotation. Offsetting: backlog visibility, personalization mix, and buybacks. ________________________________________ Ferrari (RACE) Catalyst Scorecard and 2026 Outlook 1) 🏎 New Model Launches & Portfolio — 9/10 Fresh models e.g., Roma Spider, 296 family, 12Cilindri plus track-focused/limited series sustain mix and ASPs. Purosangue remains capacity-constrained by design ≤~20% of shipments, supporting scarcity. Notes: media and management have repeatedly referenced Purosangue caps and order pauses. Rumor watch: the market expects additional halo launches into 2026; specifics beyond official IR should be treated as provisional. 2) 🔌 EV & Hybrid Transition — 9/10 Ferrari’s e-building went live in 2024 to manufacture ICE, hybrid, and the first BEV, enabling in-house e-axles/battery work and flexible capacity. Management reiterated an EV unveiling in October 2025 with sales beginning 2026; external reporting often cites incremental capacity of ~6,000 units management hasn’t fixed a public number. Strategy: electrify without diluting brand character. 3) 💰 Pricing Power & Personalization — 9/10 Personalizations are a structurally expanding, high-margin revenue stream—running ~~20% of revenues by 2025 commentary—while ultra-limited models e.g., Daytona SP3, 499P Modificata add mix tailwinds. Ferrari consistently emphasizes “quality of revenues over volume.” 4) 🌍 Global Demand & Wealth Resilience — 8/10 Order visibility remains exceptional, with management and financial press citing books effectively filled into 2026 even amid tariffs and China softness; U.S./EU/Middle East wealth pools anchor demand. Hybrids already approach half of deliveries, de-risking compliance. 5) 📈 Order Backlog & Supply Discipline — 8/10 Production is deliberately capped; Purosangue constrained to protect exclusivity. Backlog sold-out deep into 2026 reduces cyclicality and protects margins through mix and scarcity. 6) 💵 Shareholder Returns & Capital Allocation — 7.5/10 Ferrari is methodically executing a multi-year €2bn buyback through 2026 alongside dividends, while maintaining heavy R&D and capex for electrification and new platforms. Recent IR updates confirm ongoing tranches. 7) ⚖ Tariffs & Trade — 7/10 The 2025 U.S.–EU deal reduced tariff pressure versus prior peaks, a modest tailwind to margins and pricing optics for EU autos; Ferrari has shown ability to pass costs to clientele. 8) 🏆 Brand & Competitive Moat — 9/10 Ferrari’s moat resembles top luxury houses more than automakers: waiting lists, repeat/collector buyers, F1 halo, and unrivaled pricing power. This underpins luxury-goods-like multiples and high returns. (Multiple third-party and IR references.) 9) ⚔ Competition & Luxury Peers — 6/10 Peers Lamborghini, McLaren, Rimac, etc. lack Ferrari’s breadth/brand equity. Luxury EV entrants pose incremental risk, but Ferrari’s pacing plus customer loyalty mitigate. General industry assessment; monitor EV launches from peers. 10) 📉 Macro & Economic Cycle — 6/10 Ferrari isn’t immune to wealth drawdowns; however, backlog and personalization provide buffers. Management has historically protected price/mix by flexing volumes if needed. ________________________________________ 2026 Outlook What Must Go Right • EV milestone: Successful first-BEV launch & deliveries with waitlists experience parity with hybrids; no brand dilution. • Mix strength: Purosangue/12Cilindri/hyper/limited series maintain ASPs and margins; personalization share inches higher. • Financial delivery: Hitting or beating upgraded plan markers into 2026 after Ferrari indicated it is tracking ahead on profitability versus the original 2026 targets. • Capital returns: Continued cadence on the €2bn buyback; dividend growth within FCF discipline. ________________________________________ Valuation Snapshot • Quality context: Ferrari’s 2024 print and IR commentary emphasize expanding mix/personalization and ahead-of-plan profitability into 2025/26. Refer to FY24 results + CMD updates. • Peer framing: Treat RACE as luxury Hermès-like scarcity rather than auto OEM. This justifies premium EV/EBITDA and P/E vs mass OEMs, provided growth/margins hold. • Multiple work: On pullbacks to the mid-$300s, implied 2026E EV/EBITDA compresses to attractive territory vs luxury comps assuming consensus-style growth/margins investors should plug house estimates. ________________________________________ Scenarios & Targets • Bull ($700–$750) — Successful BEV introduction, backlog conversion, personalization >20% of sales, steady buybacks, and benign macro. • Base ($580–$620) — Order book carries revenues; margins hold with disciplined volumes; EV ramps without profit drag. • Bear ($350–$400) — Wealth shock or EV stumble; cancellations rise, mix weakens; tariff/FX pressure re-rates the multiple. Risk case consistent with technical $330s correction. ________________________________________ Entry & Risk Management Plan • Where to buy: Scale in $360–$380; add aggressively $330–$360 35% measured-move zone. • Sizing: For a diversified HNWI book, a core 1.5–3.0% NAV position, with room to add +100–150 bps on capitulation into the $330s. • Stops/hedges: Soft stop on a decisive weekly break <$320; hedge via short auto-luxury basket or long USD if EUR strength risks translation. • Time horizon: 18–30 months through 2026 catalysts. ________________________________________ Near-Term Catalyst Timetable rolling 12–18 months • Oct 2025–1H 2026: First Ferrari BEV unveil → initial deliveries watch order intake, waitlist depth, option take-rate, margin commentary. • Ongoing 2025–26: Buyback tranches; monitor IR posts for pace/size. • Quarterlies/Capital Markets updates 2025–26: Mix/personalization trajectory; backlog commentary; Purosangue allocation discipline.
NYSE:RACELong
by ProjectSyndicate
11
Race to the Bottom or Top?Ferrari first and foremost is an automaker, but one like no other. It is the ultimate luxury brand, producing margins more like Hermes than Ford. With 30% plus operating margins and over 20% ROIC. There's no questioning the moat, brand heritage and scarcity, that creates a long term defensible moat and compounding story. That being said, the stock got way ahead of itself. If you pay attention to my Minds post, I signalled this stock had topped out and was a race to the bottom. This was when I opened a swing short as we lost the 200 day moving average at $460. I have taken profits and we are now sitting at $378. Why did I close my short? I don't often short the best brands in the world, but the valuation was getting out of hand. Now we are sitting in line with historical valuations, currently the P/E sits at 36 and forward P/E of 34. My TA suggests we are close to a level of support at the 200 week EMA around $364. That will also complete the gap fill. The question for me is whether or not we are in a Wave 4 move heading to one last push to the upside. Or if we are in Wave B of an ABC correction. The chart suggests the latter, with a possible flush down to $307. So I remain on the sidelines for now, with a bearish bias. I have given bulls a potential price target to start accumulating a position for a longer term hold. Not financial advice, just free TA, follow for my trades. I will be watching this one closely and will keep the idea frequently updated.
NYSE:RACE
by NoFOMO_
2
RACE Wave Analysis – 10 October 2025 - RACE approaching multi-month support level 389.80 - Likely to fall to support level 375.00 RACE has been falling sharply over the last few trading sessions after the price failed to break above the round resistance level 500.00 (which has been reversing the price from January). The price is currently approaching the strong multi-month support level 389.80 (which reversed the price in April). If the price breaks below the support level 389.80 - RACE can be expected to fall to the next support level 375.00.
NYSE:RACEShort
by FxPro
Ferrari (RACE) Catalyst Scorecard AND 2026 OutlookFerrari (RACE) Catalyst Scorecard AND 2026 Outlook ________________________________________ 1. 🏎 New Model Launches & Portfolio (9/10) Ferrari’s 2023–26 lineup is packed with high-end launches. Recent additions include the Roma Spider, SF90 XX, 296 Challenge, and 499P Modificata. Demand for the Purosangue SUV has been overwhelming, with early orders suspended and deliveries backlogged into 2026. Coming next: the 849 Testarossa plug-in hybrid deliveries H2 2025/Q1 2026 and the F80 hybrid hypercar limited series, ~1,200 hp. These models should sustain ASP growth and keep exclusivity intact. ________________________________________ 2. 🔌 EV & Hybrid Transition (9/10) Ferrari is phasing electrification deliberately. After hybrids like the SF90 and 296, Ferrari will unveil its first fully electric car in October 2025 deliveries start 2026. A new “e-building” in Maranello is ready to expand capacity by ~6,000 units annually. Ferrari is building in-house motors and batteries while still pledging to keep V12 ICE alive as long as possible. This balance between heritage and compliance ensures both regulatory cover and customer enthusiasm. ________________________________________ 3. 💰 Pricing Power & Personalization (9/10) Ferrari’s bespoke strategy fuels unmatched pricing power. Recent results showed hundreds of millions in incremental profit from high-priced halo models Daytona SP3, 499P Modificata and personalization demand. Personalization now represents nearly one-fifth of revenues. Carefully managed price hikes on core models, combined with ultra-limited editions, cement Ferrari’s position as the most profitable automaker per unit. ________________________________________ 4. 🌍 Global Demand & Wealth Resilience (8/10) About three-quarters of Ferrari’s sales go to repeat customers, and nearly half to collectors owning multiple Ferraris. The expanding global wealthy class adds to the demand pool. Ferrari’s sales are well balanced across regions; China is only ~10%, limiting exposure to that slowdown. Wealth concentration in the U.S., Europe, and the Middle East provides resilience against macro shocks. ________________________________________ 5. 📈 Order Backlog & Supply Discipline (8/10) Ferrari’s order book is sold out through 2026/early 2027. The company deliberately caps production e.g. Purosangue SUV shipments limited to ~20% of total to preserve scarcity. This ensures pricing discipline and supports margin expansion. With supply tightly managed, Ferrari avoids the discounting and inventory overhangs that plague mass-market automakers. ________________________________________ 6. 💵 Shareholder Returns & Capital Allocation (7.5/10) Ferrari’s capital return story is strong. Annual dividends and share buybacks together exceed €750 million. The €2 billion buyback program through 2026 is ongoing. At the same time, Ferrari invests aggressively in R&D e-building, hybrid/EV systems without margin erosion. The balance between shareholder distributions and future growth spending is a key investor confidence driver. ________________________________________ 7. ⚖ U.S./EU Tariffs & Trade (7/10) A recent U.S.–EU deal cut auto tariffs, enabling Ferrari to avoid planned price hikes in the U.S. and improving margins slightly. Regulatory pressure on emissions is real, but Ferrari’s measured EV roadmap addresses compliance. Trade risks are less critical for Ferrari than for volume automakers, but favorable deals add incremental margin upside. ________________________________________ 8. 🏆 Brand & Competitive Moat (9/10) Ferrari’s brand power is unmatched. It combines scarcity, desirability, and F1 heritage to justify luxury-goods multiples more in line with Hermès than Porsche. The brand enables Ferrari to command unmatched ASPs and maintain margins north of 25%. Ferrari’s intangible moat protects it against both cyclical demand dips and competitive threats. ________________________________________ 9. ⚔ Competition & Luxury Peers (6/10) Direct competitors—Lamborghini, McLaren, Rimac—lack Ferrari’s scale, heritage, and breadth. Luxury EV entrants pose some risk, but Ferrari’s controlled rollout and customer loyalty limit the threat. Peer comparisons place Ferrari firmly alongside high-end luxury brands, not mass-market automakers, underscoring its unique positioning. ________________________________________ 10. 📉 Macro & Economic Cycle (6/10) Ferrari is somewhat insulated but not immune. A sharp global downturn or wealth destruction could dampen orders. However, its backlog, exclusivity, and personalization revenue provide cushions. Even in recessions, Ferrari can slow production and still maintain pricing power. ________________________________________ Catalyst Scorecard Rank Catalyst Score 1 New Model Launches & Portfolio 9.0 2 EV & Hybrid Strategy 9.0 3 Pricing Power & Personalization 9.0 4 Brand & Competitive Moat 9.0 5 Global Demand & Wealth Trends 8.0 6 Order Book & Supply Discipline 8.0 7 Shareholder Returns 7.5 8 U.S./EU Tariffs & Trade 7.0 9 Competition & Luxury Peers 6.0 10 Macro & Economic Cycle 6.0 ________________________________________ Valuation Scenarios • Bull Case ($700–$750): Successful EV debut, robust demand for new models, strong margins, continued buybacks. • Base Case ($580–$620): Order backlog supports steady revenue growth, modest EV contribution, pricing discipline. • Bear Case ($350–$400): Macro downturn or execution missteps lead to cancellations and lower margins.
NYSE:RACELong
by ProjectSyndicate
34
Race Wave Analysis – 22 July 2025 - Race reversed from long-term resistance level 505.00 - Likely to fall to support level 480.00 Race recently reversed down from the strong long-term resistance level 505.00, which has been reversing the price from the start of 2025, as can be seen below. The resistance level 505.00 was strengthened by the upper daily and weekly Bollinger Bands. Given the strength of the resistance level 505.00 and the overbought weekly Stochastic, Race can be expected to fall to the next support level 480.00.
NYSE:RACEShort
by FxPro
Is Ferrari's stock still bullish?Is Ferrari's stock still bullish? Technical Outlook Elliot Wave theory suggests a cautious bullish stance. The present correction seems to be a temporary setback, likely driven by guidance and tariff fears, but sets the stage for a potential rally to $520-$540 if support is not broken. However, risks of a deeper correction (i.e., to $420-$440) persist if pressures from the outside intensify. The stock is currently trading above all three of its major EMA levels — daily, weekly, and monthly — that is a good technical signal. The rising daily EMA at 479.98 suggests that short-run momentum remains healthy. The weekly EMA at 461.77 provides medium-term support, while the monthly EMA at 421.08 supports the longer-term trend solidly. Positive Sentiment Factors Ferrari reported robust Q1 2025 results, with net revenues of €1.79 billion (up 13% YoY), an operating profit of €542 million (up 22.7%), and a net profit of €412 million (up 17%). Adjusted earnings per share were €2.30, surpassing analyst expectations of €2.28. This shows Ferrari’s strong pricing power and demand for personalized vehicles. Analyst Sentiment: Optimism remains for Ferrari among some analysts. UBS raised its price target to $560 from $520, maintaining a Buy rating, with the new Ferrari Elettrica a major catalyst, the company said. Bernstein and RBC Capital maintained Outperform ratings on the stock at $575 and €500, respectively. Barclays upgraded Ferrari to Overweight, calling it a "safe haven" in a shaky European automotive environment. Brand Strength and Strategic Positioning: Ferrari’s luxury brand and high demand for models like the Roma Spider, 296 GTS, SF90 XX, and Purosangue bolster its market position. Neutral Sentiment Factors Market and Industry Context: The broader market has been volatile due to trade developments and tariff relief rallies. Ferrari’s stock has been influenced by these macroeconomic factors, but its luxury positioning makes it less sensitive than mass-market automakers. Formula 1 Performance: Ferrari’s underwhelming Formula 1 season, with McLaren significantly outscoring Ferrari in points poses some concern among investors. While this does not directly impact stock performance, it may indirectly affect brand sentiment among enthusiasts. Negative Sentiment Factors Tariff Concerns: Ferrari shares have been sensitive to Trump's U.S. tariff policies. A tariff increase would add up to $50,000 to the price of an average Ferrari, potentially cutting sales volumes in the U.S., which accounts for 28.8% of net sales. JPMorgan warned that tariff impacts might be "worse" for Ferrari, lowering the price target to $460 from $525 Conclusion Ferrari stock has a bullish but cautious bias, supported by solid fundamentals, favorable technical momentum, and positive analyst sentiment on upcoming product releases such as the Ferrari Elettrica. Macro risks, however, including U.S. trade policy and market volatility, are still major overhangs.
NYSE:RACELong
by alfredwhite
RACE Wave Analysis – 22 May 2025- RACE reversed from round resistance level 500.00 - Likely to fall to support level 460.00 RACE earlier reversed from the strong resistance area between the major round resistance level 500.00 (which has been reversing the price from the middle of 2024) and the upper weekly Bollinger Band. The last time the price reversed down from the resistance level 500.00 it formed the weekly Japanese candlesticks reversal Evening Star – signalling the strength of this resistance level. Given the overbought reading on the weekly Stochastic indicator, RACE can be expected to fall to the next support level 460.00.
NYSE:RACEShort
by FxPro
Ferrari Wave Analysis – 27 February 2025 - Ferrari reversed from round resistance level 500.00 - Likely to fall support level 440.00 Ferrari recently reversed down from the resistance zone between the round resistance level 500.00 (previous yearly high from 2024) and the upper weekly Bollinger Band. The downward reversal from this resistance zone is likely to form the weekly Evening Star Doji – if the price closes this week near the current levels. Given the strength of the resistance level 500.00 and the overbought daily Stochastic, Ferrari can be expected to fall to the next support level 440.00.
NYSE:RACEShort
by FxPro
Ferrari Is Looking Ready To RaceThat's right, a bad play on puns... I'm not even a dad yet lol. Momentum is favoring RACE big time. It is setting up for a really strong pullback. Touch of the Keltner channel Gap up from earnings (earnings drift in our favor) Anti setting up on the MACD Momentum on MACD daily and weekly in our favor Bears are trying hard if Friday's bar is reversed, look for strong price action to the upside Strong weekly momentum on last weeks bar This is as good as it gets for a set up!
NYSE:RACELong
by JoeRodTrades
RACE (Ferrari) – Quality has its PriceMIL:RACE has a technically interesting setup that also fits well with the weekly setup that I presented a few weeks ago. The current consolidation has once again reached the lower zone and should find support from here one more time. Recently, a significant bounce was achieved from here several times. In addition, Ferrari is moving at the daily SMA 200 line and has bounced upwards from this (as well as from the horizontal support). In the 4h chart we see a nice RSI divergence as well as a breakout from a falling wedge. Both bullish signals. Fundamentally, Ferrari is not cheap, but quality has its price. The backlog extends years into the future, the pre-order lists are full to bursting, the line-up presented is technically flawless and in demand and the cash flow is immense. In addition, the company is still family-owned (which secures the share price) and the current F1 season with Hamilton and Leclerc as the team should also be interesting. We are initially targeting the area around EUR 438 and then the previous ATH at EUR 457. This results in an ROI of 10%. Should the daily closing price fall below EUR 400, the trade would be disqualified and closed. Target zones 438 EUR 457 EUR Support Zones 400 EUR
MIL:RACELong
by LGNDRY-Capital
1
Ferrari - Don't Miss Out on 50% ROI!Very strong setup here. Ferrari respects the SMA200 for years and did touch the SMA200 and bounce from it. It also respected the current trendline and the SMA200 and trendline bounce did happen at the 23rd Fib retrace level. Very bullish setup. -- 🐂 Trade Idea: Long - RACE 🔥 Account Risk: 20.00% 📈 Recommended Product: Stock 🔍 Entry: +/- 426,00 🐿 DCA: No 😫 Stop-Loss: 390,00 🎯 Take-Profit #1: 600.00 (50%) 🎯 Trail Rest: Yes 🚨🚨🚨 Important: Don’t forget to always wait for strong confirmation once possible entry zone is reached. Trade ideas don’t work all the time no matter how good they look. Do not get a victim of FOMO, there is always another trade idea waiting. 🚨🚨🚨 If you like what you see don’t forget to leave a comment 💬 or smash that like ❤️ button! — Ferrari is a super strong brand. Backlog is huge and current waiting time is measured in years not months. Luxury stocks were punished during the last months because of fear of growth and a weak consumer but Ferrari is somewhat else. Misconceptions regarding shipments and China are putting pressure on Ferrari's shares since the third-quarter announcement. Nevertheless, the shipments' decline is a result of an ERP transition, and the reduction in China is intentional. Don't forget, people who buy Ferraris do not care about inflation or the economic situation of a country. Also, you can't lease a Ferrari, you can only buy it. This gives the manufacturer a strong cashflow. In addition, Ferrari's unique market position, strong brand, and prudent management justify its high valuation and promise market-beating returns. — Disclaimer & Disclosures pursuant to §34b WpHG The trades shown here related to stocks, cryptos, commodities, ETFs and funds are always subject to risks. All texts as well as the notes and information do not constitute investment advice or recommendations. They have been taken from publicly available sources to the best of our knowledge and belief. All information provided (all thoughts, forecasts, comments, hints, advice, stop loss, take profit, etc.) are for educational and private entertainment purposes only. Nevertheless, no liability can be assumed for the correctness in each individual case. Should visitors to this site adopt the content provided as their own or follow any advice given, they act on their own responsibility.
MIL:RACELong
by LGNDRY-Capital
RACE (Ferrari N.V.) BUY TF M15 TP = 479.50On the M15 chart the trend started on Oct.3. (linear regression channel). There is a high probability of profit taking. Possible take profit level is 479.50 This level, which I have outlined above, is certainly not a “finish” level. But it is the level that has the “highest percentage of hits on target.” Using a trailing stop is also a good idea! Please leave your feedback, your opinion. I am very interested in it. Thank you! Good luck! Regards, WeBelievelnTrading
NYSE:RACELong
by WeBelieveInTrading
Can a Prancing Horse Outrun an Electric Future?In the ever-evolving landscape of luxury automobiles, Ferrari stands as a beacon of innovation and exclusivity. The recent upgrade from J.P. Morgan, elevating Ferrari's status from "Neutral" to "Overweight," underscores the company's resilience and strategic prowess in navigating complex market dynamics. This vote of confidence, coupled with a substantial increase in the price target to $525, reflects Ferrari's unique position in the luxury sector and its ability to maintain growth even in the face of global economic challenges. At the heart of Ferrari's success lies a paradoxical strategy that defies conventional wisdom: deliberately producing fewer cars than the market demands. This approach, rooted in the vision of founder Enzo Ferrari, has cultivated an environment of perpetual desire and scarcity. With a staggering backlog of 24 to 30 months, Ferrari has not only engineered exceptional vehicles but has also orchestrated an "underappreciated cultural evolution" within the company. This disciplined approach to growth, combined with the power to command premium prices, provides unparalleled visibility into future earnings and sets Ferrari apart from its luxury peers. As the automotive industry races towards electrification, Ferrari is poised to redefine the boundaries of performance and sustainability. The company's foray into the electric vehicle market, promising an "incredible driving experience" that remains true to the Ferrari ethos, demonstrates its commitment to innovation while preserving its core values. However, this journey is not without obstacles. Ferrari must navigate challenges such as an ongoing investigation into its chairman and the conclusion of a key partnership with Santander. Yet, with strong financial performance, positive investor sentiment, and a clear strategic vision, Ferrari appears well-equipped to maintain its pole position in the luxury automotive market, promising a future as thrilling and exclusive as its storied past.
NYSE:RACELong
by MorMedia
A 420 bet on RaceFerrari has been under my radar for a while now and it's finally giving me the chance to own and trade some shares. After a correction pattern on the weekly and daily charts, price on MIL:RACE has been consolidating around 410 and 225 without re-testing the 375-350 area, this flat price action on MIL:RACE for the last 160 days shows me bullish strength and a high probability for a long pattern to play out on significant time frames. A position has been opened with a 6% Stop Loss 👀
NYSE:RACELong
by CryptoMaister
Ferrari: Extended fifths and the case for a topFerrari has undergone a relentless bull market since February of 2016. With new all-time highs seemingly every day, it is hard to think the stock may be vulnerable to a move that could see it lose 30% or more of its value, but the count would suggest the RACE may be coming to an end. The wave count in RACE is rather clear and unambiguous. Price has developed what appears to be a mature impulse wave from its 2016 low to its current highs. Waves {1}, {3}, and {5} all subdivide into clear "fives" and waves {2} and {4} subdivide into clear "threes". What is notable about this wave count is the fact that wave {3} is shorter than wave {1} coupled with the fact that wave (5) of {5} appears to be "extended". One of the main rules of wave development in impulse waves is that wave three cannot be the shortest wave. When you encounter a situation where the third wave of an impulse is shorter than the first wave, you can identify the maximum limit the fifth wave can travel by measuring the length of the third wave and projecting it off the low of the fourth wave. Since wave three cannot be the shortest wave and wave three is still shorter than wave one, wave five must not be longer than wave three in order to satisfy the rule. With this in mind, we can set our upper limit to 498, where wave {5} would become longer than wave {3}. If we observe the development of wave {5} from its starting point in June of 2022, we can see it has developed in a straightforward manner with clear and clean subdivisions. We can see that wave (5) of {5} has also subdivided into a clear five-wave pattern as price accelerates towards new all-time highs. However, there are cracks showing in the foundation. Wave (5) of {5} has developed whats called an "extension". An extension occurs when waves 1,3, or 5 of an impulse develop with exaggerated subdivsions that can sometimes be larger than the waves of the one larger degree of which they are apart. Extensions that occur in the fifth (and final) wave of an impulse are useful to identify because the guidelines of wave formation specifically identify behaviour that is unique to the termination of an extended fifth. The guideline explains that following the completion of an extended fifth wave, price will often retrace to at least the second wave low of the same degree in what is usually a sharp move. That puts our minimum downside target at 330.54 but it is likely to only be a rest stop on the way towards more significant levels such as the wave (4) low at 285 and the wave {4} low at 167.45. The cherry on top is the wave 4 of (5) of {5} triangle pattern. Ive discussed and displayed the terminal nature of the triangle in my writing before and this pattern is no different. Triangles always precede the final move of the trend of the same degree. In this case, it forebodes the impending completion of three degrees of fifth waves in what is likely to be a swift reversal through 412 towards 330 and 285.
NYSE:RACEShort
by PhiWaveCapital