Hog Wild (HOG)

Shares of Harley-Davidson HOG are in full rally mode today, up $1.20, or 5.27%, to $23.86. Harley could be called the ultimate consumer discretionary stock. People definitely need to be secure in their jobs and economic outlook in order to purchase a motorcycle. Not surprisingly, when the markets take a nosedive, Harley gets hammered as investors believe consumers cannot afford such luxury items. Harley peaked in late April around $36 just as the broader market averages also topped out. Since April 20, shares of HOG have fallen from $36.13 to $21.26 on July 6. That's a whopping decline of 41.1%. Harley has now rallied for three consecutive days. While investors may have gone bargain hunting, perhaps a consumer cyclical stock like HOG is telling us that better times are ahead and the market has discounted much of the bad data that has come out in recent weeks. While it's too early to tell, it may be worthwhile to pay attention to HOG because the stock has an uncanny ability to nail both market tops and bottoms.