Harley-Davidson Breaking Down?

Published on Wednesday, 25 August 2010 05:24 Written by Danny Miller

New York, August 25th (TradersHuddle.com) - Shares of Harley-Davidson, Inc. (NYSE:HOG) closed the trading session at $24.08 below calculated support at $24.70 breaking the stock technically, raising concerns by investors, as the move might trigger more 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 $24.70 and resistance at $26.92; 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, given that Harley-Davidson's stock is still near the broken support, traders will be focusing on $24.70 to see if the stock 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 $24.70. For traders wanting to establish a long position, wait for price action to take the stock back to calculated support, which will provide a best entry point to build the position.