Herbalife (HLF) is down 12% today. Time to buy? Watch this video and make your own decision. (January 05, 2015)
I want to look at Herbalife ( NYSE:HLF ) here. The stocks down over 12 percent just today and so you may be wondering whether it’s a buy. I would say it depends on what your timeframe is.
Looking at this, first of all 32-33.00 is the low here for today so maybe you want to buy this.
Well, lets look at the daily chart, this thing just really bottomed out at 2:30, the last hour and a half of trading, but this was not followed by some screaming snap-back bunch of buying. This is a stock that probably just started trading sideways on short covering. The thing that you want to do, in my view, is hope for a bounce so you can short it.
Look at the weekly chart, well that looks pretty interesting, lets zoom out and see. This is kind of a classic double top; top, top, forget about all this other stuff, the stock’s in a really good uptrend, a little bit higher level, but the stock is now down to where it’s testing the low here. If this stock continues to break down through this level this could go much lower just from a technical standpoint, this is a really, really ominous, very, very ominous sign.
We don’t want to anticipate that happening, but what we do want to do is just look at these levels. You saw a lot of buying come in the mid-twenties; this stock still has quite a ways to go. So what I would want to do is I’d stand aside. I can’t really think about shorting this stock right now, not after it’s already gone down so much. I want to be short the stock but you’ve got these zigzags here, down here, we’re looking for the next move higher.
So you want to wait for the next move higher, if it doesn’t happen, if the stock just keeps going lower, you know what then? You missed the trade, at least that’ the way I look at it. I’m not saying the stock is going to move higher, go ahead and short it at 37.50 or 38.00 and then ride it on to victory down here. I’m just saying this is not the time to be shorting this stock, but it is the stock to be shorting at the right time.
So hopefully you get more of an oversold bounce, more shorts covering, come up hopefully if the short comes up, and I hate to use that word hope and I’ve used it more than once in the last minute than I ever have; the stock comes up, that’s when you want to be able to short the stock and look for lower prices.
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