Buying The Dip Long Term

Hello you wonderful and intelligent individuals that make up this forum. I sincerely hope everything is going well for you and you are having a nice week.

I wanted to kindly please ask i know alot of people when long term investing use the buy the dip strategy. For instance Ferrari NV has now shown a weakening of its long term uptrend. However it still has price targets of around $373. It seems a temporary dip in the share price but the fundamentals of the business has not changed.

I kindly wondered please if you had any thoughts on what technical indicators i could use to determine whether a dip is ending and starting an uptrend again, i have thought possibly about using the volume indicators please? If you kindly had any thoughts on this i would be forever grateful and thankful.

Sending you lots of good wishes and i truly hope everything continues to go well for you. Very best wishes.

Hi. I previously commented on the RACE chart for you when it was having a strong rise and said that it could bounce off 370 and retrace to 330-350. It did exactly that never breaking 370 (it did go above 370 for 2 days but on both days the price was below 370 at some stage). It is now back to circa 330.

Even assuming that it is fundamentally strong, the price could still retrace a little more to find a strong support level because 330 isn’t a strong level for RACE.

Interestingly the recent drop when it hit 337 exactly followed a trend line that my chart analysis script generated back in Oct.

No indicator will tell you whether a dip (short downtrend) is reversing to form a long term uptrend or simply bouncing before continuing downward. At most an indicator will indicate the possibility of it starting to rise but can’t say whether that rise will last 5 days or 100 days.

With very little reasoning to back it up, my own guess is that the price may trade in the 325 to 345 range for a few days (= anything from a week to a month).

I don’t see that the long term uptrend that started in October is broken. Yes the short term rise to 370 broke but the longer term trend I think is arguably still intact. Thus if you believe in the fundamentals this may be an opportunity to trade or buy. Personally I’m not a fan of the luxury brands and I’m always amazed how well they perform. Thus personally I’d be cautious but as I say if you believe in the fundamentals this pullback was fairly predictable and I don’t think (by itself) changes the fundamentals

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