A share for the 'insanely brave'

Flybe Group (LSE:FLYB) & Ferrari (NYSE:RACE)

FlyBe has been following a pretty solidly defined glide path since 2011 with the price being, frankly, quite boring.

The current blue downtrend is at roughly 40.128p with a clear suggestion should the share better this level, it's perhaps moving into take-off territory. But for now, we suspect it faces a hard landing once we exhaust all flight related clichés!

As the chart shows, the price has retreated below the red uptrend which, while being very recent, is about the only sane marker of strength.

Or, perhaps lack of strength as the situation now suggests weakness below 37p should continue to 34p and ideally a bounce. But in the event 34p breaks, it appears the price almost must recoil from the 30p level.

This is why the blue downtrend is so crucial, as it appears to give a fairly reasonable gauge as to whether any take-off is liable to remain airborne.

For the insanely brave - or perhaps just the insane - the price can already be regarded as "in the zone" as, allegedly, the 3p difference between the current price and the potential bounce level of 34p isn't that big a deal assuming some research justifies confidence in the company future.

It results in the situation where above 40.128p allows an initial 44p with secondary, if (when) bettered, at 50p. This, of course, is a sodding nuisance as it tends indicate a maximum altitude for the near term given the effort employed to stop it bettering 50p earlier this year.

Common sense therefore indicates we need to see this actually close above 50p before daring to assume the price intends serious longer-term heights as we can now calculate a ceiling of 88p in such an event.

For now, though, hopefully 34p is the bounce point. Visually, of course, fans of double bottoms will expect 30p.

Ferrari (NYSE:RACE)

Ferrari have been experiencing a degree of success in Formula One but it's still unclear whether this impacts the share price.

Thankfully, the price has met all our upward targets and now appears floundering around with the charming innocence of a group of political candidates completely unaware of which name is going to be called as winner.

The key number for Ferrari is 86p. The issue with 86p is simple - it represents the highest the price can achieve given its acceleration from the 31p low of 2016.

We rather like these ceiling levels, as common sense alone will suggest that, should Ferrari close a session above 86p, it enters an entirely new race track and we cannot immediately divine any future targets.

This state of affairs is far from uncommon amongst US share prices when we find ourselves awaiting some volatility before being able to calculate the future.

In plain English, if Ferrari closes above 86p, go long and wait. Just don't expect any immediate input from ourselves.

Any slowdown would be indicated by traffic below 70p currently, but, realistically, the price needs to break the solid red line at 55p before we'd dare express interest in reversals.

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, Shareprice, or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

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