Buy Alert: Ferrari NV (RACE)
TRADE INSTRUCTIONS
Date: May 19, 2017
Name: Ferrari NV
Symbol: RACE (NYSE)
Type: Open
Limit: Buy below $85
TRADE TARGETS
Holding Period: 3 months
Target Return: 10.6%
Annualized Return: 42.4%
Target Price: $94
Stop Loss Level: $75
COMPANY DESCRIPTION
Ferrari NV is an Italy-based designer, manufacturer, and retailer of sports cars that is incorporated in the Netherlands. It operates under the Ferrari brand and is active in over 60 markets worldwide through a network of authorized dealers. Its sports cars portfolio includes, F12berlinetta, FF, Ferrari 488 GTB, 488 Spider, 458 Speciale, Ferrari California T, F12tdf and LaFerrari. The Company also offers financing services through Ferrari Financial Services. Link to company website.
TRADE RATIONALE
Today is national “Bike to Work Day”, so this morning I met up with the president of Investing Daily, Phil Ash, to bike into work. Watching him blast up hills and blow by slower riders on the flats reminded me of a finely-tuned sports car (that’s a bit of an exaggeration, but keep in mind he signs my paycheck).
Coincidentally, our Rapid Profits Matrix issued a buy alert on Ferrari today based on its strong momentum. Yes, RACE has been on a tear lately, doubling in price over past twelve months. But that is somewhat misleading since Ferrari’s IPO occurred in October 2015 while the European economy was still considered a basket case. It quickly decelerated from its IPO price of $52 to $32 five months later, then stayed in cruise control for another five months before putting the pedal to the metal after the Brexit vote last summer.
Despite a brief tap on the breaks this week after a special counsel was appointed to investigate President Trump’s dealings with Russia, the stock market resumed its uphill climb. We are still in a momentum market and Ferrari’s strong quarterly earnings report two weeks ago reinforced its position as a market leader. We don’t plan to be in this position more than three months, but then again you don’t need to be in a Ferrari very long to cover a lot of ground.
Note: RACE is optionable.
Stock Talk
Dramatic License
Went the options route on this one. 8/18 $80 calls
(BTW, love the last line in Jim’s post.)
Rick
I also did the Aug $80 calls
Dramatic License
Good “call.” 🙂
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black arrow
HI DL, If I am not mistaken you are a bit ‘new’ to trading Options.
With that in mind, here is what I did this AM. I knew I was driving a distance to the HYUNDAI dealer for a couple of things on my wife’s Veloster. Yesterday On RACE in my regular account, I was surprised to discover it had revved up and sold at my sell order of 7.90. I wanted to do even better on my contracts in my IRA I went to think or Swim saw the suggested price to sell was 8.50. I arrived on time with a Starbucks in hand, and discovered those contracts same call as yours had been sold! This made my day after reading lots of doom and gloom for markets. I have had RACE before jim mentioned it some worked some did not so gotta profit -do your best to keep it
Cheers
Dramatic License
Yes, fairly new to trading them overall, but fairly comfortable for where I am. I had been trading straight stock for a number of years before starting into options. Just want to keep learning, as we always should. I appreciate your insights to the board.
Dramatic License
BA, do you have a suggestion in this case for protecting profits without getting out? I could put a protective put, but the cost at this point seems high to put one at 85. Protective put with a longer/shorter date?
black arrow
I was just perusing chart have not been home too long. We had a Gap up open this AM yesterdaus close wasat 86.72. So what if you were to put a stop about there, either mental or real? Looks as though the gap ups have held pretty well. Just threw on a Chandelier exit to chart that comes in at 85.22. I trued pivot points
first area of resistance is at 90.61 read it may linger there. I have looked at Tushar Chandes CTM Chande Trend meter it has a value of 96.08 – impressive!hope you win whichever way you go I won since I was on the road with my wifes car a good distance at it closed for me at 8.50 I was happy with that
Dramatic License
I think a mental stop makes sense. I am watching it pretty religiously :). It’s nice when the gain comes right out of the gate like this.
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Dramatic License
Hated to, but went ahead and sold the options this morning. 71% actual gain for 2 weeks of holding = not bad. Maybe it’ll dip and I’ll get back in.
Dramatic License
And Jim, thanks for this great trade!
Jim Pearce
You”re welcome, and nice trade!
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Roger Dehring
Jumped into the cockpit for a spin around the track, Jim,
Bought an August debit call spread for a -$5.70 debit (AUG 80/95 calls). Debated doing an AUG/NOV diagonal, but decided to stick with your plan of being out in August.
Roger
Kurt D
Hope you dont mind if I ride shotgun with you on your debit call spread Roger.
Roger Dehring
Not as long as you keep the muzzle pointed out the window!
Welcome aboard.
Roger
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black arrow
Decided to enter an 80 August call too. In a sort of inside Joke it maypay for my family member who is the resident ‘car nut’.
Heres hoping we all win
black arrow
Don’t burn your tires off today, surprise surprise! I meant to say may pay for the mid kids donation to his field tripI used another holding.
Hey Dramatic – Best Wishes here I sold in one account and have a larger amount in my IRA. Nice gain today. I had set a stop for the 80 call was triggered while out running errands
Dramatic License
Not complaining at all on this one. Been strong out of the gate and I hope it keeps on accelerating. 🙂
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Dramatic License
Ferrari off to the races again this morning. Seems like it has been getting good press lately too, which can’t hurt.
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Jim Pearce
Please note that I have raised my stop price for RACE given its extreme outperformance over the past two weeks (https://www.investingdaily.com/systematic-wealth/alerts/38183/stop-price-raised-for-ferrari/). Hopefully, it will keep shooting up but I don’t want to risk giving back our gain if the stock market goes on a fender bender.
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