The Harley HOG Breakout July 16

Jul 16, 2009: 11:32 AM CST

Many traders might be missing the recent breakout in motorcycle retailer Harley Davidson (HOG).  Let’s take a look at Harley Davidson’s chart past and see the recent price breakout which resembles a flag formation.

Harley (HOG) followed the market, making new lows in November, January, and March.  In fact, it looks eerily similar to the broader market, with the exception that price almost tripled from March to May.

Price slammed against the falling 200 day SMA and pulled back into an ‘abc’ flag-like stable correction into the $15 level.

At the moment, as we’ve formed swing lows into July, price has formed a positive momentum divergence.  Reference back to the turn of 2009 to see an ideal “Three Push” pattern example.

Volume rose over the average on the last two trading session, and we’re running “hot” today – already up 7%.

Strength in Harley is generally a good sign for the retail sector, and what’s good for the consumer (if they are spending) is of course good for the market.

It’s often a smart idea to pay attention to key retail stocks to get an inside glimpse into how consumers might be feeling which could give us clues into the future of the market as a whole.

If price does continue upward from this powerful move, it could be a strong bullish sign for the market in general.

Corey Rosenbloom, CMT
Afraid to Trade.com

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2 Comments

2 Responses to “The Harley HOG Breakout July 16”

  1. SteveH Says:

    Did you actually take a look at HOG's numbers before writing this? Yes, in principle technical analysts are only interested in the tape. But it surely pays sometimes to watch fundamentals as well, if only to gauge how fragile the sentiment underlying current price moves might be. Examination of HOG (and wider economic) fundamentals screams of a rally built on hype and hope. Sure, let's trade the heck out of it – but let's also stay grounded in reality.

  2. SteveH Says:

    Did you actually take a look at HOG's numbers before writing this? Yes, in principle technical analysts are only interested in the tape. But it surely pays sometimes to watch fundamentals as well, if only to gauge how fragile the sentiment underlying current price moves might be. Examination of HOG (and wider economic) fundamentals screams of a rally built on hype and hope. Sure, let's trade the heck out of it – but let's also stay grounded in reality.