Harley-Davidson, Inc. (NYSE: HOG)

Harley-Davidson, Inc. engages in the production and sale of heavyweight motorcycles. It operates in two segments, Motorcycles and Related Products, and Financial Services. The Motorcycles and Related Products segment designs, manufactures, and sells cruiser and touring motorcycles for the heavyweight market. This segment sells its products through a network of independent dealers and distributors primarily in North America, Europe, the Middle East, Africa, the Asia-Pacific, and Latin America. The Financial Services segment provides wholesale retail financing; and insurance and insurance-related programs primarily to its dealers and their retail customers in the United States and Canada. This segment also offers motorcycle insurance, as well as extended service contracts, credit protection, motorcycle maintenance products, gap coverage, and debt protection products to motorcycle owners. The company was founded in 1903 and is headquartered in Milwaukee, Wisconsin.

To analyze Harley’s stock for potential trading opportunities, please take a look at the 1-year chart of HOG (Harley-Davidson, Inc.) below with my added notations:

HOG has rallied nicely with the overall market since October of last year. Over the last (5) months, the stock has created a couple of key price levels to watch. Most importantly, the $45 support level (navy) that was also a brief resistance back in January. This support has been tested on 5) different occasions. In addition, the $50 (red) price has commonly acted as resistance in both March and June.

The Tale of the Tape: If HOG rallies back up to $50, you could enter a short play. If it breaks above $50, you could certainly enter a long play. You could also buy HOG if it comes back down to the $45 level, or short the stock if it breaks that $45 support.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade.  Capital preservation is always key!

Good luck!

Christian Tharp, CMT