Time to buy or sell Harley-Davidson ($HOG)? This will help. (June 26, 2018)


We are going to look at HOG, Harley-Davidson ( NYSE: HOG ) here; it has been in the news for a lot of different reasons. Actually not a lot, really just two. It has been in the news because of the tariffs and the EU. They announced that they are going to start building some of their stuff overseas so that they avoid those tariffs. And then Trump took them to task for that over Twitter. Man, I love social media; so that is really the big deal.

So what are we going to do with this stock? First of all, with respect to the tariffs and whether this is a good move or not; look, these guys have got to do something. Back in 2017 you see where their stock was. At one point they had cute a third of their market cap off of this stock and now the stock is essentially down close to that level again. The stock is down from the recent high. Sure, fine. Why, because they reported earnings? No. It is because the stock is basically just down; it’s a stock that just stinks right now. They have got real issues from a profitably standpoint. Fine. Let’s ignore all that, I don’t care about that. I care about this stock as a trade.

Here is how I would do it, it is pretty simple and it would be this: The stock opens up tomorrow at all, anything above 41.32 you can start a position. Frankly, I would prefer to see the stock open lower. I would prefer to see the stock sell down close to this intraday low here of 40.46. The closer the better because I would be keeping a stop, I would not short this stock, you’re going to wrong way, I would keep a stop just slightly below today’s intraday low of 40.46. I want to be buying as close to this as I can and then look at this snapback, as a rubber band move.

We have seen this with several stocks recently and this would be the latest. It is not the perfect setup, I will show you one that was in just a second. So you buy this stock tomorrow. Again, HOPEFULLY it gaps down a bit and then you can start a position. And then IF the stock starts to trade ABOVE today’s open of 41.12, that is when you would add a position. And then if it starts trading above 42.00, and more particularly above the 50-day moving average, that is when you would be in a full position.

So I have given you three different entrances here, three different buy points to take this stock. With a good risk management plan your stop would be just below today’s intraday low. Then you can use pivot points and volume-weighted average price indicators, (VWAP), also to get bigger, or not, depending on how the stock trades around those indicators.

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