This share could be worth 10% more

A free Ferrari (NYSE:RACE) and Hays (LSE:HAS)

There's sometimes a strange phenomena with the markets, one we always hesitate to comment on as it's perhaps a bit stupid.

But when we allocate shares for manual analysis once the markets end-of-day data is imported, recently the bulk of the action takes place in the "A to M" part of the alphabet rather than the back "N-Z" half.

The inevitable conclusion, if you're day trading, is that things tend happen faster at the start of the alphabet.

Told you it was silly. But last week, we witnessed a 67% bias favouring A to M whereas this week it has been fairly equal - so far.

Of course, it's perhaps just a reflection on people reading just so far down a column and getting bored rather than a great conspiracy involving a lazy stock market. But for quick in-out trades, perhaps this is something worthy of consideration.

To save readers from mental gymnastics, Hays falls into the early part of the alphabet. And, better still, it appears to be showing some fairly decent prospects given recent share price movements.

The immediate prospect suggests growth above 170p will attain 183.5p next. Achieving such a point is liable to be a big deal longer term as it moves the company into "higher high" territory with a secondary expectation at 214p.

Or maybe even 309p if the company start delivering positive news, though, it must be admitted, we're using data from 2002 to give this number and, thus, goodness knows what the timeframe would be.

Despoiling this fountain of optimism (we think 183.5p is attainable fairly soon) the share price requires a drip below 154p to escape the immediate growth cycle, a movement like this suggesting weakness coming toward 142p initially with secondary, if broken, at 124p.

The odd thing is, all this would show is a slowdown in its prospects and not cancellation as the price needs break 95p to totally foul its future.

And of course, there's another aspect and it's the blue line on the chart. This downtrend - which the price seems to respect - dates back to 15 years and surely is important!

Last time we looked at Ferrari, we'd mentioned $75 as a viable upper target and the share price appears to have achieved this with a recent high of $74.99.

Critically, though, it managed to neither better nor close above $75 and, as a result, we're now looking for drop targets as visually we'd expect another attempt at the $75 level.

Before digging into the pits, Ferrari does have a final target should $75 be bettered. It's at $79.32 or so. If the market intends the share price to go higher, they'll need start gapping it up at the open anytime now.

For those tempted to a long position in this scenario, the stop can/should be fairly tight as it's a bit of a punt.

However, a short position looks more viable as below $71.3 at $69.75 next, maybe even $67.75 if the market is having an off day. Stop is at $73.3 at its tightest.

Realistically, Ferrari now needs break the red line – $54 currently – before we'd suspect a real breakdown is happening.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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.