Since the end of December, the Harley Davidson stock (NYSE: HOG) has been driving in the upwards direction, but from January 17th it has been failing to make higher highs, as the share price found good resistance near the 37.65 barrier. But that did not stop HOG from making higher lows, which suggests that we may be seeing an ascending triangle being formed. According to textbooks, such formations tend to break through their upper side, but until we see that happening, we will take a cautiously-bullish approach and continue monitoring the key levels.
If we eventually see a break through the 37.65 level, this is when more investors may get interested, as such a move might open the door to some higher areas. The first potential resistance zone on our radar is around 39.20, marked by the low of November 20th. If the buying activity is strong, that zone could just be seen as a temporary pit-stop, a break of which might lift the stock to test the 40.00 barrier, as it marks the highs of December 6th and November 5th. Also, around that area, HOG could meet the medium-term downside resistance line taken from the high of October 1st, which may slow down the price acceleration for that moment in time.
Looking at our oscillators, the RSI sits comfortably above 50 and keeps on pointing higher. The MACD is above zero and its trigger line, also pointing north. Both indicators suggest that there may still be some upside momentum left, which supports the above-mentioned scenario.
Alternatively, if we see the stock sliding lower, breaking the short-term upside line (drawn from the low of December 24th) and dropping below the 34.75 hurdle (the low of February 8th), this may spook investors for a while. Such a move may clear the path towards the next possible support area at 33.55, which is the low of January 29th. Slightly below sits another good possible support level, which could get tested, at 33.05, marked by the low of January 3rd.
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