Harley-Davidson: Rough riding ahead?

The stock has definitely been going through a tough time lately and is now trading down 15.4% during 2007. The real trouble started in February when 2,800 workers went on strike but this is not the reason why Farley is predicting the weaker sales for the company. According to Farley the sales figures can not be attributed to the strike because dealers had enough inventory and that we could be seeing an industry-wide slowdown.

A couple of weeks ago Harley traded down to test support at $60 and it looked as though the stock would be able to bounce off that level and make up some of its recent losses. Today creates doubts on that. If the stock closes out the day under $60 we could be in store for an even greater decline in prices. The next level of support is down around $57 and I wouldn't be surprised to see shares get to that level over the next week or so.

The company is next due to report earnings on April 19th, so there is going to be some volatility headed up to that date. If the company can put up good numbers for March then the stock could find its footing, but if not... watch out below.

Historically March accounts for about 45% of first quarter sales, so this will be an important month for the company.

Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.