Harley-Davidson has been trading in a narrow range as it continued to struggle with heavy resistance near its declining 200 day moving average. A breakout could now be brewing. Some quick thoughts:
Despite battling heavy resistance near the 200D the stock gave up little ground in December. A downgrade last week(Longbow cut to ‘underperform’)did little damage. HOG is working on a second straight higher monthly low as a major bottom near the $46-$45 area(July, August, September, October, November lows)has formed.
HOG will need to convincingly take out the $52.30 area to confirm a breakout. This zone has capped the last five weekly highs. On the downside, a close back below $49.00 would take out the January low indicating the 200 day moving average is still in control. Until then we are positive on the set up. With a very high short interest ratio(13.45)there is plenty of fuel to power a meaningful rally. At current levels we believe HOG is a fairly low risk buy with a stop close only set just below this week’s low($50.70).
HOG is scheduled to report fourth quarter results on January 30th.
We have no position in HOG at this time.