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As a contributor to the New Low Observer (http://www.newlowobserver.com/about-this-site), we intend to give new insights on a low risk approach to trading in dividend paying stocks for tax deferred accounts. The New Low Observer (http://www.newlowobserver.com/about-this-site) is not intended for... More
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  • How Far To The Downside For Herbalife? 3 comments
    May 3, 2012 12:48 AM | about stocks: HLF

    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.

    image

    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.

    Stocks: HLF
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Comments (3)
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  • untrusting investor
    , contributor
    Comments (9903) | Send Message
     
    More and more equities getting slammed now. How are the general markets managing to hold up?
    3 May 2012, 01:07 AM Reply Like
  • New Low Observer
    , contributor
    Comments (2518) | Send Message
     
    Author’s reply » Greetings UI,

     

    From what we can tell, these "isolated" blow-ups are building the negative sentiment that may break the camel's back. We just don't know which one is the final straw. But this is vaguely similar to what happen in the dot-com bust. One by one, the companies started imploding until it percolated up to Sun Microsystems and Cisco. Then the cover article titled "Burning Up" appeared on the cover of Barron's March 20, 2000, it was all downhill after that.

     

    We could be wrong, but that is our take.
    3 May 2012, 10:16 AM Reply Like
  • New Low Observer
    , contributor
    Comments (2518) | Send Message
     
    Author’s reply » So far, HLF has managed to fall in accordance with the SRLs as indicated above. Today, by falling below the May 15, 2102 low of $42.44, HLF appears headed to the $34.89 level.

     

    Regards.
    19 Dec 2012, 09:48 PM Reply Like
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