What fascinating pattern is developing into a key support level for Harley Davidson (HOG) shares?
Let’s study the “interesting arc” trendline pattern and note the pivot point that will either serve as a floor of support (a buy signal) or a breakdown reversal signal (should support fail).
Here’s the Broader Picture Daily Chart (note Support):
Let’s start first with the blue support trendline at the $ 62.00 per share level. With the exception of a quick blip in January, buyers supported the stock at this level.
We’re seeing another potential – not guaranteed – support bounce event that could take shares at least to the falling 20 EMA and 200 SMA overlap near $ 67.00 per share (a logical target if shares do bounce up off this level).
Note also the reversal candle (long shadow) and the buy candle the next day which took price into $ 65.00 per share (a quick bounce).
Focus your attention on this level with respect to an aggressive support buy signal … or should the sellers overtake buyers, it could be a trigger entry to sell shares short (or take stop-losses) under the $ 62.00 level.
We do note a surge in sell volume along with new momentum lows in the momentum oscillator. Be cautious here.
Now, let’s study the interesting intraday arc pattern developing into this support level:
I highlighted the steady to accelerating sell-off in price from the $ 74.00 level to the current $ 63.00 per share support.
Note the sharp bounce up and push toward the upper “arc” trendline into $ 65.00.
As we’ve seen with prior “Arc” Trendline patterns, a price breakthrough above (or through) the upper trendline – especially when it morphs vertical – can trigger an aggressive reversal-type buy signal.
We’ll be watching for that potential development on the intraday frame.
Nevertheless, I enjoy studying and trading arc patterns and Harley Davidson shares (HOG) may provide another educational example (playing out in real time) to follow into the near future.
By the way, we’re seeing a successful outcome of the “Arc Trendline” Pattern I highlighted in Electronic Arts (EA) earlier in the week – check out that example as well.
If you’d like to learn more about similar “Arc Trendline” patterns, see any number of prior posts on this concept of “Parabolic/Arc Trendlines:”
“Charting the Long-Term Parabolic Arc Trendline in the S&P 500 since 2009?
“Strength in WYNN and the Parabolic Price Arc“
“March Crude Oil Structure and One of My Favorite (Arc) Patterns”
“March Check-up on (Intraday Arc Trendline) Internals at the Highs”
“Arc Trendline on the Weekly US Dollar Index (still in motion)”
“Key Inflection (and Arc Trendline Lesson) in Apple AAPL” (great lesson)
“The Dominant “Arc” Trendlines to Watch this Week in Gold“
“Intraday Rounded Arc Playing out (SP500)“
Lesson in Trading Intraday Arc Trendline Breaks/Reversals
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).
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