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Key Support and Resistance to Watch in Ferrari Stock This Week

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Ferrari stock

Ferrari stock (RACE) traded on a mixed to positive note in the week ended September 22 and settled at $113.47 with a weekly rise of 3.1%.

The company’s stock has risen ~95.2% on a year-to-date basis but has fallen 0.9% in September so far. Ferrari stock posted an all-time high of $118.10 on September 6.

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Key support and resistance levels

Last week, Ferrari stock made a failed attempt to breach a resistance level near $113.70 for four days in a row, which reflected the fading strength of the bulls. In the week ahead, $113.70 should act as a major resistance area.

On the downside, this price action has tested a horizontal support near $108.50 twice in September. Therefore, any downside violation of this support area could turn investors’ sentiment to negative for the near term.

Rating downgrade by Morgan Stanley

According to a Reuters report published on September 7, Morgan Stanley double downgraded its ratings on Ferrari stock from “overweight” to “underweight.”

A report by TheStreet noted that “Morgan Stanley as analysts become concerned with valuation” of Ferrari. This could be the primary factor that reversed the trend in Ferrari stock in September.

Ferrari has reported strongly positive earnings per share (or EPS) growth in the last eight consecutive quarters. This consistently solid performance could be the key factor that could challenge the bears.

Ferrari’s sales of V12-engine cars rose during the last few quarters, which helped boost its profitability. In general, the company’s profit margins from V12 cars can be higher compared to its margins from V8 models.

Ferrari’s margins are much better than mainstream automakers (XLY) Fiat Chrysler (FCAU), Ford (F), and General Motors (GM).

Read on to the next part to learn how Harley-Davidson stock traded in the third week of September.

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