Healthy Pause For Harman International (HAR)

Posted by barkand on January 25, 2012 under Classic chart patterns, xattascope | Be the First to Comment

Harman International (HAR) is now in a classic technical setup.

On the daily chart below, we see Harman hitting lows along with the rest of the market in early October. Then prices shot up to a high of $44. Since then, it has spent three months forming a base. Some would call it a “coiled spring”. Others might see a “lumpy” cup-and-handle pattern. In either case, it is a bullish development for HAR. And now the shares are once again at $44 and drifting sideways to down on diminishing volume over the past three days. This is exactly the behavior we want to see if prices are to continue higher.

Let’s take a closer look at this base through the xattascope, to be sure the market is not tricking us.

On this hourly chart, we see that the leveling off of prices has been accompanied by quiet accumulation. Once it reached the $44 level every burst of volume pushed HAR higher, as noted on the chart. The bulls are clearly interested in snapping up more shares any time the price drifts a little bit lower.

We expect HAR shares will resume their uptrend before the week is over – possibly as early as today.