Image Source: Pixabay

I would typically provide a plethora of charts to look at, but I’m sort of out of that mental mode right now. I’ll dive into some charts next week, but I do want to slow things down a tad for the next few days.

Why? Well, when you have an eight-year-old, you know that you’re on a bit of borrowed time for Christmas. Those “questions” have started -- the ones that require a solid, “Well, what do you think?” when it comes to the man who will now be breaking in our windows due to the lack of a fireplace in our new house.

This week could be the end of this era. She’s too rational, and some of the kids at school have already been saying things (a little too bluntly). That innocence all goes by so quickly that it doesn’t make logical sense. But the world doesn’t slow down for us. It just keeps spinning.

This will be a very good week, regardless. Amelia’s off from school, I get my annual box of high-end baseball cards for myself, and this is my wife’s favorite holiday. We’ll be in New York to see friends next weekend, see the trees in the city, and unwind the rest of this year, which is necessary. Don’t work too hard this week.

I’ll probably knock out my Postcards segment in the next 48 hours, as I hope that the things outside my control don’t bubble up. I don’t just wish a great single day, or eight days, but a great last 10 for you through the end of the year.

Make the most of this time, start forging new habits now (not on Jan. 1), and think about how those goals align with who you want to be. That latter element is what matters because a goal doesn’t accomplish anything for you. Understanding how these things align with your values and purpose will help you stay committed to whatever changes you aspire toward.

This was a tough year for me, but I’m not going to wish the next 10 days away just to get to 2026. No, we’re going to slow down and make the very most of this time.

Now, onto the financial element of this text. Today, I have a little bit of a change. No rant about monetary policy, but a question about a pretty good company that has seen better days. So, first, I must poise the question.

What Is Wrong with Harley-Davidson?

As I start to assess my list of quality and momentum opportunities for early 2026 - that list comes out for readers in about 10 days - I have started my research. I use a combination of Ben Graham intrinsic value analysis, Piotroski F score analysis, key moving averages, and historical 52-week assessments.

This morning, as I whittled our names down from about 100 to 25, one name really stood out and finds itself under the microscope: Harley-Davidson (HOG). I looked at this chart and said, “What the hell is going on here?”
 

(Click on image to enlarge)

Now, I’m not a motorcycle rider. I’ve listened to occasional interviews about the challenges of revamping this brand. But the last time I really paid any attention to it, it was an interview between its CEO and Morgan Stanley. And as I started reading interviews and articles since 2023, it's just been one battle after another.

Here are some of the challenges the company has faced in just 30 months:

• Weak consumer demand for discretionary vehicles.
• Declining global motorcycle sales and shipments.
• Difficulty attracting younger riders vs older core customers.
• High interest rates and tough macroeconomic headwinds.
• Consumer reluctance to make big-ticket purchases.
• Tariff uncertainty and trade cost pressures.
• Leadership and CEO succession challenges.
• Corporate governance disputes and activist investor pressure.
• Underperformance of the electric brand LiveWire.
• Perception issues with product relevancy vs. competitors.
• Dealership closures and franchise challenges.
• Excess dealer inventory and distribution friction.

Coincidentally, Morgan Stanley is also the firm that recently cut its price target to $21 with a Sell Rating. But we’ve reached this point now where the math warrants some conversation. By many traditional metrics, this stock looks cheap. It’s trading for 70% of Book Value, Free Cash Flow under 6.5x, and EV/EBITDA at 9.44.

It also has a surprisingly short float at 15% and has just bottomed out on oversold conditions in the Relative Strength Index and the Money Flow Index for the first time since April. See the blue at the bottom of the RSI and MFI on the daily chart?

Last time we were here? April, during the whole issue with Trump and trade.
 

(Click on image to enlarge)

The point is that we don’t tend to stay in both of these conditions very long. That’s a deep contrarian sign here.

Coming out of Quad Witching, investors and traders should watch that orange line - that’s the eight-day exponential moving average. We want to see the stock start to turn here, and for that orange line to recover back toward the pink (20-day), blue (50-day), and green (100-day) moving averages. I know this is overly simplistic, but we are currently overbought, the stock is very cheap, and it maintains a strong F score.

No one wants this thing. I can’t find a Seeking Alpha recommendation to save my life. Wall Street isn’t bearish, but it’s not helping. UBS’ Robin Farley put the stock at a $27 target on Nov. 13. No other well-rated analyst seemingly has anything to share.

We are down in the territory where targeting a put spread ahead of earnings makes sense, and we hope that the pressure unwinds from oversold territory. You’d have to want to own the company for $19.70 -- if it were filled (and I’m still debating this).

But if you look out to Jan. 23, 2026, selling the $20-$18 put spread and succeeding at a $0.30 credit could deliver a 76% probability of profit, a 17.6% return, and an annualized gain of 189%.

Again, I’m speaking to my more advanced traders on this. For investors who don’t like options, pay attention to that eight-day EMA. If we start to see some positive crossovers, it will be worth speculating on very tight stocks back at these key moving averages.

This is a contrarian buy after Triple Witching, sentiment low, and momentum starting to improve. It will definitely be a buy when our Russell 2000 signal turns green, which feels like it’s 48 hours away. It’s worth a bid here with a tight stop in the 3% range.

Finally, our January Quality Momentum list arrives in a week for members, as does our 2026 outlook on trends, key math behind our momentum readings, and much more. So, you can pick up a subscription for at least a month to get all these benefits. For our Founding VIP members, we will host our quarterly call in mid-January. I will have an update on this as we move toward the end of the year.

That’s all we have for Sunday.

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