Harley Davidson Inc HOG 3.16% reported yet another mixed quarterTuesday, delivering earnings and revenue beats on lower-than-expected retail sales and an 8-percent decline in operating margin. The company reaffirmed its Q4 and full-year motorcycle shipment guidance, which the market took as a positive sign.
Still, revenues dropped below $1 billion and have now declined in 10 of the last 13 quarters. The stock responded positively to the report after initially dropping to around the $45 level, it quickly rebounded and finished the day up 2.0 percent. Harley Davidson tacked on another 1.0 percent gain on Wednesday and is now at a critical technical juncture.
Despite the positive reaction, the two-day move didn’t break the stock out of the downtrend it has been in since it peaked at $62.48 back in March. The chart below shows the red resistance line that currently rests right around $48.50.
At the same time, the $45 level has now held as support on three different occasions and seems to be a major support level for the time being.
As the horizontal support line and the negatively sloping resistance line converge, they will pinch Harley’s share price into an increasingly narrow trading range until they force a breakout in one direction or the other.
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