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Ferrari Stock Is About to Crash — Time to Sell Your Shares

After all the hubbub surrounding the long-awaited initial public offering of Ferrari (RACE) , and the hyped-up opening that put in the stock's price peak on the exact day of it coming public, shares haven't done well. After the stock's IPO was priced at $52, it went as low as about $32 in February and is now trading around $44.42. While the good news is that shares have bounced higher from their lows, the bad news is how they got here.

Above is is the daily bar chart of Ferrari, showing the rise off the lows has occurred in only a corrective A-B-C structure. Even if there is one more high, the pattern won't change, nor will the expectation that the $32 zone is doomed for an eventual...