Harman Could Be Headed Higher

Harman International  (HAR) is a top ten S&P 500 gainer today. The stock is up over 3% on its second straight session of heavy upside trade. This breakout-type move, which is piercing a key overhead trendline, could be the initial stage of a powerful rally. Harman investors should take on a more positive view of the stock in the near term.

On Aug. 4 Harman left behind an ominous spike high after reporting strong fourth-quarter results. The stock began to drift lower immediately in a very orderly pattern. As October came to a close the stock was back below its 200-day moving average as overhead pressure grew. Harman remained below this important long-term indicator as earnings neared. Yesterday's strong first quarter earnings provided a healthy upside jolt that lifted the stock back above heavy supply near the 200 day. With today's follow-through move it appears Harman is headed for a very nice finish to a rather ugly week for the markets.

With the help of two straight days of solid gains, Harman is leaving behind a significant bottom near the October/November lows. In the near term, Harman investors should consider the stock a low-risk buy between $83 and $81. This nearby support area includes last week's high near the lower band. On the downside, a close back below yesterday's low of $79.40 would indicate this morning's breakout has failed.

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