Is Harley-Davidson Breaking Down?

Published on Thursday, 28 June 2012 07:04 Written by TradersHuddle Wire

New York, June 28th (TradersHuddle.com) - Shares of Harley-Davidson, Inc. (NYSE:HOG) closed the trading session at $44.93 below calculated support at $45.16. The stock broke down technically, raising concerns as the move might trigger additional selling.

Harley-Davidson, Inc. (NYSE:HOG) manufactures and sells motorcycles. Its products include heavyweight touring, custom, and performance motorcycles, as well as a line of motorcycle parts, accessories, and general merchandise.

Harley-Davidson's stock was trading in a well defined range with support at $45.16 and resistance at $50.89; given that this range was broken traders will be closely monitoring the stock's price action for clues of direction.

From a technical perspective, it can be expected that previous support becomes resistance, as the new range gets defined. However, $45.16 will remain in focus as Harley-Davidson's price action places the stock near the broken support. Traders will be waiting to see if it can bounce back and return to its previous range.

Traders wanting to establish a short position in Harley-Davidson can do so if the stock breaks the intraday low, or if the stock bounces back and selling materializes again at previous support of $45.16. However, if traders want to build a long position, the best entry point to do so is when the price action takes the stock back to calculated support.