HLF Stocks Trading Idea
What is one of many things bad traders and investors do that contributes to their failure? Answer; sitting short in a stock that has a high short float % and looks as if it is ready to break out to new 52 week highs. HLF on the “Squueze Me” Scanner!
This week, Trade Ideas technology seeks to exploit those people using the “Squeeze Me” scan for just such a scenario. Herbalife (HLF) has 34% of the 90 million share float sitting short (meaning they need to buy to close their positions). A break above 74.50 and HLF is off to new 52 week highs forcing the short sellers to buy (cover) or sit thru more pain.
The Trade of the Week is conditional of a print at 74.50 in HLF this week to be considered live and on the books.
The suggested stop for HLF will be a break below 70.00. The suggested target is 83.50 which just happens to be all-time highs for HLF. If this target is achieved, it may be wise to consider selling only half the position to see if the other half can make new all-time highs. Please only use an amount of shares that works for you in case the stop level beneath 70 needs to be adhered to for risk management.
Footnote: This is a table showing the maximum profit for all past 2017 Trades of the Week. Timing the top is impossible but this table shows how much alpha was possible when considering the exit of these positions. The trades outlined in red eventually hit their suggested stop prices, so you can see the importance of timing and harvesting profits along the way when you can, especially those that move above 10%.
Targets are not absolute. Targets involve timing. Profits can and should be harvested along the way.