Life Partners Holdings (NASDAQ:LPHI), the company that matches life policy sellers with senior life policy purchasers is down over 10% today after receiving a notice from the SEC. This news brings uncertainty to company and you can see it in the heavy volume selling done today. I believe you can’t fight the trend here, at least technically and here are the reasons below.
1) Selling is continuous throughout the day with heavy volume. LPHI has already done over 2x it’s five day average volume and it’s only three o’clock on a very slow Friday.
2) LPHI is breaking down to new 52 week lows and as Larry Hite says “when a stock is making a new 52wk high or low, it’s telling you something.
3) I like the risk to reward the down side. The stop should be placed just above today’s high, 7.11, or the recent pivot high on the daily chart which is 7.49. Looking at Fib target’s on the daily chart I have 5.63 (measured move), 4.43, and 2.49.
Conclusion: Taking a short speculative position in LPHI with a stop initially above today’s high, risking roughly $1 to make a potential of $1.72 – $3.66 in profits.COME JOIN OUR LIVE BROADCAST MON-FRI 8AM – 5PM AT HEDGEFUNDLIVE.COM. PICK A CHANNEL AND GET CONNECTED.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.