Heyer Capital, LLC

investment management and timely advice from a local CPA (Fox Valley, Wisc.)

Harley Davidson – HOG

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For some reason, people don’t seem to mind buying Harley Davidson stock. To most folks, every heavy cruiser bike on the road looks like a Harley, so they must be selling a lot of them, right? Talk about great advertising for the brand: you can hear them as well as see them.

I guess folks in Wisconsin like buying Harley like folks in New Jersey like buying drug stocks and folks in Texas like oil stocks. We just know enough people that work there or are otherwise familiar enough to us that we think we know more about the company than we actually do.

Let’s set aside the increase in delinquencies on Harley’s loans to customers. (Rising delinquencies cure themselves as the lenders stop making foolish loans and the folks that are prone to default, actually do so.) What’s a write-down among friends, anyway?

Harley has put in a series of lower bottoms, Point C. That by itself usually indicates the trend is lower and the stock will continue the decline. However, at Point A the stock inched ahead of its recent high at Point B. This indicates a pause in the decline. If the stock moves above of Point A, that would make consecutive higher highs, and a possible place for bottom fishers to pick up some shares.

Harley Davidson - HOG

The fact that lower volume (Point D)has accompanied the price movement detracts a bit from the favorability of the pattern indications. However, exchange volume overall has been muted the past few weeks.

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Written by heyercapital

April 16, 2007 at 9:52 am

Posted in charting, stock ideas

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