Harley-Davidson - HOG - close: 39.89 change: +0.23

Stop Loss: 38.75
Target(s): 44.50
Current Gain/Loss: unopened
Time Frame: up to the earnings report (late January)
New Positions: Yes, see below

Company Description

Why We Like It:
With the U.S. economy still vulnerable you might think that high-end motorcycles would be a tough business right now. Then again analysts have always pointed out that the high-end consumer didn't see much of a slowdown. A quick look at HOG's chart and the stock seems to be chopping sideways. Yet upon closer inspection you could argue HOG has formed an inverse head-and-shoulders pattern and the recent breakout past resistance near $39.00 is an entry point. I want to see a little bit more confirmation.

I am suggesting a trigger to open small bullish positions at $40.35 with a stop loss at $38.75. Our target is $44.50 but we may have to exit early given our time frame. HOG is tentatively scheduled to report earnings in late January and we do not want to hold over the announcement.

Trigger @ 40.35

Suggested Position: buy HOG stock @ 40.35

- or -

buy the Feb $40 call (HOG1221B40)

Annotated chart:

Entry on January xx at $ xx.xx
Earnings Date 01/24/12 (unconfirmed)
Average Daily Volume = 1.5 million
Listed on January 05, 2011