HOG's Breaking Out with Real Motion

January 12, 2018

Trades & Tutorials

By Geoff Bysshe

blankIn Tuesday’s live training about our Real Motion indicator I reviewed Harley-Davidson (HOG) as a good example of Real Motion indicating that a breakout would be one to follow.

I don’t think you need Real Motion to appreciate the potential in this chart, but it does make the breakout more reliable.

Here’s why I thought you’d like to see this chart…

  • The base is well formed.
  • There has been a retracement to the positively sloped 50-day moving average.
  • There’s good consolidation prior to the breakout.
  • The breakout is over the 200-day moving average.
  • And the icing on the cake is that Real Motion, our proprietary measure of momentum over three different time frames, has one of the most powerful patterns.

The Real Motion pattern is a leading divergence.

A leading divergence is when the 50-day Real Motion line (blue) crosses over the 200-day line (green). Just like reading a cross of the price 50 vs. 200-day moving average, this cross in Real Motion indication a trend change in momentum that you can’t see any other way.

The Real Motion ‘trend change’ cross happened a week ago. The 50 and 200-day price averages still have not crossed.

I love bases that show Real Motion leading like this, because the breakouts are powerful. They also often provide good retracement trades. This means there will probably by more opportunities here soon.

Harley-Davidson (HOG) Daily

For the trader who’s observant…

You’ll notice the same time of leading divergence occurred at the highs in April with the break below the 50-day moving average in price.

If you’d like to learn more about Real Motion you’ll find the training replay here for a short-time.

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