Ferrari $RACE Slumps but Signals Oversold; Bounce Imminent?

Ferrari’s shares have endured a punishing five-day decline, marking the most protracted losing streak since the market troughs of March, a period when broader equities grappled with volatility amid economic recovery signals. This downturn has pushed the stock into territory ripe for technical scrutiny, where indicators suggest an oversold condition that could prelude a rebound, even as investors weigh the luxury automaker’s enduring appeal against short-term pressures.

Dissecting the Streak: Echoes of Past Lows

The current slide in Ferrari’s stock echoes the March lows, a time when global markets were navigating post-pandemic uncertainties, and the company’s shares dipped amid broader sector headwinds. Back then, the streak broke as delivery volumes stabilised and investor confidence in high-end consumer resilience returned. Today’s sequence, with shares closing at $436.24 after a session that saw prices range from $428.00 to $441.58, reflects a cumulative drop exceeding 10% from recent peaks, driven by macroeconomic jitters rather than company-specific frailties. Historical parallels show that such streaks often resolve with sharp recoveries, particularly for assets like Ferrari, where scarcity in product allocation underpins pricing power. Analysts at RBC, maintaining a bullish stance as of early August 2025, have labelled similar dips as overblown, pointing to the stock’s tendency to snap back when sentiment stabilises.

Volume tells a compelling story here, with the last two sessions recording turnover of over 1.6 million shares—surpassing the 10-day average of around 607,000 and marking the highest two-day activity since February 2021. That earlier surge coincided with a pivot point, where institutional accumulation preceded a multi-month rally. Elevated trading levels now hint at capitulation selling, potentially exhausting downward momentum and setting the stage for buyers to step in. This isn’t mere noise; it’s a signal that the market is digesting the streak’s implications, much like in prior episodes where volume spikes heralded inflection points.

Technical Signals Flashing Oversold

Delving into the indicators, the daily Relative Strength Index (RSI) has plunged to its lowest since March 2022, a level that historically correlates with exhaustion in bearish trends for Ferrari. In 2022, this metric bottomed amid supply chain disruptions and currency headwinds, only for the stock to rebound as earnings visibility improved. An RSI dipping below 30, as observed now, often precedes mean-reversion trades, where the oscillator’s divergence from price action underscores undervaluation relative to momentum. Investors attuned to these cues might view this as a contrarian entry, especially given Ferrari’s insulation from mass-market cycles through its waitlist-driven model.

Compounding this, the last two candlesticks have closed entirely outside the lower Bollinger Bands, a rare deviation that amplifies the oversold narrative. Bollinger Bands, which measure volatility around a moving average, expand during turbulent periods, and breaches like this—last seen prominently in early 2021—frequently mark climactic lows. For context, the 2021 instance followed a guidance tweak and preceded a 20% bounce within weeks, as the bands contracted and price gravitated back toward the mean. With Ferrari’s 50-day moving average at $484.92 now a distant target, the setup aligns with patterns where such extremes invite tactical positioning for a snapback, provided no fundamental cracks emerge.

Volume as a Reversal Catalyst

The spike in two-day volume, the most intense since February 2021, merits closer examination. That 2021 period saw shares recover from a dip tied to production delays, with high turnover signalling the washout of weak hands. Fast-forward to now, and the pattern repeats: volume exceeding three times the three-month average of 369,201 shares suggests forced liquidations amid broader market angst, potentially clearing the path for accumulation. Sentiment from verified sources, such as TipRanks aggregates as of 3 August 2025, rates the stock a ‘Buy’ with a consensus target implying upside to around $500, reinforcing the notion that this volume burst could catalyse a pivot.

Bounce Potential Amid Market Noise

Positioning for a bounce here hinges on the interplay of these technicals with Ferrari’s resilient fundamentals, which have historically buffered against transient slumps. The company’s Q2 2025 earnings, released on 31 July, revealed a 4.4% revenue uptick to figures beating analyst expectations by a slim margin, despite forex drags—echoing the post-March recovery where similar beats ignited rallies. With shares now trading at a forward P/E of 45.78 based on projected EPS of $9.53, the valuation compresses from recent highs, offering a margin for error if deliveries sustain their trajectory. Analyst models from GuruFocus, updated pre-earnings, forecasted Q2 EPS at €2.38, which Ferrari surpassed, bolstering confidence in full-year guidance that anticipates adjusted EBIT margins holding firm.

Broader market sentiment, as captured by professional accounts on platforms like Investing.com, views the dip as a buying window, with dark wit noting that even in recessions, the ultra-wealthy queue for limited-edition models. This resilience was evident in the 29% volume growth reported in a prior quarter amid economic doubts, underscoring Ferrari’s detachment from cyclical woes. For those eyeing a rebound, the key lies in monitoring whether the streak extends or if stabilisation around the $430 level—near the 52-week low change of +44.70 from $391.54—draws in dip-buyers, potentially mirroring the swift 15% gains post-2022 RSI lows.

Long-Term Hold: Beyond the Bounce

While the immediate allure is a technical bounce, the case for holding Ferrari into perpetuity rests on its moat-like qualities, which transcend short-term streaks. Since its 2015 IPO, the stock has delivered total returns dwarfing benchmarks, with a 318.37% rise over 52 weeks through 3 August 2025, against a backdrop of consistent margin expansion. The announcement of an eighth share buyback tranche up to €360 million, detailed in late July 2025 filings, signals management’s conviction in undervaluation, much like programs that fueled post-streak rallies in the past.

Ownership anecdotes, such as high-profile figures like Nvidia’s Jensen Huang holding stakes, highlight the brand’s cachet among tech elites, but the real anchor is Ferrari’s controlled supply model, which sustains pricing and exclusivity. Trailing twelve-month EPS of $10.16, up from prior cycles, supports a price-to-book of 21.95, premium yet justified by growth in personalisation revenues. Analyst sentiment from HB Wealth Management, which increased holdings by 89.7% in Q1 2025, labels it a core position for long horizons, with models projecting compounded annual growth in the mid-teens through 2030.

In essence, this losing streak, amplified by technical extremes, positions Ferrari for a potential reversal, while its fundamentals argue for endurance. Investors navigating this juncture might find the setup compelling, blending tactical opportunity with strategic permanence.

References

Automotive World. (2025, August 1). Ferrari: Keep on delivering robust results in Q2 2025, stronger confidence in full year guidance. Automotive World. https://automotiveworld.com/news-releases/ferrari-keep-on-delivering-robust-results-in-q2-2025-stronger-confidence-in-full-year-guidance

Bilello, C. [@charliebilello]. (2024, February 2). Ferrari $RACE reported a 29% increase in revenues in the most recent quarter. Waiting list for certain models now extends into 2026. A good reminder that there are multiple economies… [Post]. X. https://x.com/charliebilello/status/1753275251520127258

Brrrake [@brrrake]. (2023, May 29). Nvidia’s Jensen Huang owned a Ferrari. One day he went back to his Ferrari dealer and asked to buy the latest model… [Post]. X. https://x.com/brrrake/status/1663165466855055361

Daily Political. (2025, August 2). Ferrari N.V. (NYSE:RACE) Stock Holdings Lifted by HB Wealth Management LLC. Daily Political. https://dailypolitical.com/2025/08/02/ferrari-n-v-nyserace-stock-holdings-lifted-by-hb-wealth-management-llc.html

DeItaone [@DeItaone]. (2024, May 8). RBC SAYS FERRARI’S POST-EARNINGS SHARE PRICE DECLINE IS OVERBLOWN. [Post]. X. https://x.com/DeItaone/status/1787809233691406528

DEXWire News [@DEXWireNews]. (2024, May 8). $RACE | Ferrari NV 13F Filing | HB Wealth Management, LLC has filed a new 13F form… [Post]. X. https://x.com/DEXWireNews/status/1788051911066660937

GuruFocus. (2025, July 30). Ferrari Q2 Preview: Margins, Model Mix, and EV Signals in Focus. GuruFocus.com. https://www.gurufocus.com/news/3013181/ferrari-q2-preview-margins-model-mix-and-ev-signals-in-focus

Heisenberg [@Heisenberg]. (2025, August 3). $RACE longest losing streak since March. Two-day vol highest since Feb 2021. RSI lowest since Mar 2022. Both C&S outside lower BB… [Post]. X. https://x.com/Heisenberg

Investing.com. (2025, July 31). Ferrari to launch eighth share buyback tranche of up to €360 million. Investing.com. https://investing.com/news/company-news/ferrari-to-launch-eighth-share-buyback-tranche-of-up-to-360-million-93CH-4163937

nbalajiv [@nbalajiv]. (2022, August 2). Ferrari $RACE posted strong Q2 results and raised its full-year guidance. Net revenues up 24.9%… [Post]. X. https://x.com/nbalajiv/status/1554503279249276928

SatsDoji [@SatsDoji]. (2023, September 5). Ferrari $RACE is one of the few stocks you can probably just own forever and never sell… [Post]. X. https://x.com/SatsDoji/status/1699123769283956805

The Globe and Mail. (2025, July 31). Ferrari releases Semi-annual financial report for 2025. The Globe and Mail. https://theglobeandmail.com/investing/markets/stocks/RACE-N/pressreleases/33816847/ferrari-releases-semi-annual-financial-report-for-2025

TipRanks. (2025, August 1). Ferrari Reports Strong Q2 2025 Financial Performance. TipRanks. https://tipranks.com/news/company-announcements/ferrari-reports-strong-q2-2025-financial-performance

Vetteleclerc [@Vetteleclerc]. (2022, November 14). Ferrari is the only stock I own. [Post]. X. https://x.com/Vetteleclerc/status/1592223368073576450

Yahoo Finance. (2025, August 1). Ferrari (RACE) Beats Q2 Earnings Estimates. Yahoo Finance. https://finance.yahoo.com/news/ferrari-race-beats-q2-earnings-130002968.html

Yahoo Finance. (2025, July 31). Ferrari N.V. (RACE) Q2 2025 Earnings Call Transcript. Yahoo Finance. https://finance.yahoo.com/news/ferrari-nv-race-q2-2025-072011507.html