Harley Davidson Accelerates on Takeover Talk

Looking at some numbers, it appears that more than 11,400 April 30 calls have traded. This number is considerably higher than the open interest, suggesting that these positions are new purchases or sales. With such high volume, we could see the 30 level act as a measure of resistance. Heavy option open interest at a level can provide support or resistance, depending on the direction of the option. HOG may face the ugly side of option open interest, as heavy call accumulation at $30 could provide a substantial hurdle.

Of course, to get to the $30 level, HOG will have to conquer the $28 level - which has provided resistance since late 2009. A close above $28 could be a good sign for HOG, but it will have to maintain that move in order to make an assault on the $30 level. Of course, today's news could go a long way to helping out the situation. The problem for all of those bulls potentially getting in on the 30 call is if KKR does make an offer to HOG that is $30 or less. The value of the stock will have been determined by an outside company and option players may be left holding the bag.