Harley-Davidson (HOG, $40.17, down $2.27) took a stab at $43 but folded like a cheap lawn chair when the market went south. The stock got as high as $42.98 on Monday and opened higher than Friday’s close of $42.56. The push to $43 was too great and in the end the stock dropped 5% on no news-worthy event.

I had mentioned in Monday morning’s blog that I would have liked the stock to get over $43 for a quick push to $44 because $45 was going to be a battle. Turns out the bears showed up early which is why I said to place stops should the stock falter. I still like the position but for right now we are going to have to take what the market gives us.

The January 40 calls (HOGAH, $4.20, down $1.30) were trading at $4 in my original blog back in mid-June and the stop could have been placed at $5 to ensure a 20% gain. The January 50 calls (HOGAJ, $1.00, down $0.50) were trading at $1.15 and should have been sold at $1.40 for about the same gain.

Even though the sell-off in Harley was disappointing, the bright side is that we made 20% and we can still keep these options on our radar. The fact that the stock broke below $40 today may provide an even better entry point somewhere down the road.

Rick Rouse