After the news of Herbalife (NYSE:HLF) getting slammed, we were curious about what the downside targets for the stock might be using Edson Gould's Speed Resistance Lines. Below is a chart representing the conservative downside target of $45.45 and the extreme downside target of $24.33.
So far, HLF appears to have support for the stock price at $45.45. However, if HLF falls below the $45.45 level, it would suggests that HLF will decline to, at minimum, $34.89 before finding stabilization in the stock price. A decline $24.33 would mean that HLF could revisit the 2009 lows.
We believe that it is worth examining whether or not these downside targets are accomplished. In our view, the downside targets are reasonable estimates of where the stocks could go before initiating new research on whether these companies have viable business models.
Disclaimer: This piece is a continuation of the examination of Edson Gould's speed resistance lines as explained in prior articles. This is not an endorsement to sell short at the current levels nor buy these stocks once falling below the extreme downside targets.