Foreign auto makers have shown notable resilience in recent weeks, with selective strength emerging across Japanese and European names.
Volkswagen and Mercedes-Benz ADRs are both trading 30% below their most recent 52-week highs. On the other end, Honda is up 26% over the last three months while paying a 4% dividend yield.
Meanwhile, Toyota is carving out a bullish inverse head and shoulders formation with a pivot of $195. This divergence has put the spotlight firmly on the group's standouts, none more so than Ferrari, which continues to pull away from the pack.
In the domestic auto space, there is also a clear divergence, with General Motors leading the group higher, up 51% over the past year. Since the start of August, GM's chart has begun to look like a bull flag, while the stock trades just 6% below its most recent 52-week high.
By comparison, Ford, Rivian, and Tesla remain 21% to 31% below their respective annual peaks. Of the group, Tesla looks most attractive to me on the weekly time frame, as it has carved out a double-bottom pattern while trading between the very round $300 and $500 levels since the start of 2026.
A look at the daily and monthly charts quickly shows why I am so sanguine about Ferrari's setup.
Looking at the daily chart, the stock has outperformed its European luxury peer Porsche on the ratio chart since mid-May, and that relative strength could continue. The secular 200-day simple moving average is beginning to flatten, while a bullish golden cross was recorded three weeks ago as the 50-day simple moving average moved above the 200-day SMA.
Since last November, the stock has essentially traded sideways while a bullish inverse head-and-shoulders pattern took shape. The rough neckline sits around the very round $400 level, where a bearish counterattack candle appeared on Dec. 4 and a dark cloud cover formed on July 7. At key lows, bullish island reversals emerged on March 23 and July 27, accompanied by gap-ups of 5% and 6%, respectively.
The technical setup suggests the stock could be preparing for a move higher. I believe it could reach $490 by year-end, representing a potential 15% gain from current levels. Remain bullish above $405.
Ferrari was trading around $433 Friday.
Turning to the five-year monthly chart, notice the very real possibility of a bullish MACD crossover. The last time that occurred, the price ran spiritedly at the start of 2023 during the early stage of a bull flag, which ultimately failed at the very round $500 number.
First, a bearish harami was recorded in September 2024. Then, the final nail in the coffin came via a bearish evening star in October 2025, when the stock lost 17%. Notice that the middle candle of the pattern was an ominous doji in September last year.
The stock finally bottomed at the 50-month SMA starting in January and recorded a bullish engulfing candle this February. Then came a bullish hammer in March, a doji in April, and a spinning top in May. Look for a gravitational pull toward $500 in the coming months as the stock carves out a cup base.
Doug Busch is the senior technical analyst at Barron's Investor Circle. His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.