Mar 012013
 

The top of the T2 target zone on AAPL has now been hit.  As there are over 30 daily charts alone on AAPL since originally shorting it back on Aug 27th at 679.99 (plus numerous charts on other time frames), I have just included the first daily chart that was posted after the close on Friday, Aug 24th (with the short entry to be at the open on the following Monday) along with the updated chart.  Remember, not only was AAPL solid case made to short AAPL at the end of Aug just points off the highs when the analysts were tripping over each other to “one-up” the last guy’s price target that was already well into the 4 figure level, but this final target zone was also added to the stock back then, before the trade was entered and not after the stock had already fallen 20%+ and suddenly all of the AAPL bears started crawling out of the woodwork. To be clear, this is not an update to the trade as I had decided to close the AAPL short when the first target was hit, reversing it to a long right off the lows on Nov 16th, then exited the long for a nice gain on the quick bounce.  Although my original intention was to re-enter the trade after the expected bounce off T1 and ride it back down to T2, I never “felt” a clear and objective entry so have just watched the stock since then.

I just wanted to update the chart since it has been a while and not only is AAPL still one of, if not the most widely followed stocks in the world but also because the AAPL could provide an objective long entry soon.  Although the stock could quite likely find support here at the top of my target zone, I believe the odds favor the stock moving lower towards the bottom of the zone (410) before all is said and done.  If I am wrong, fine.  There are plenty of other fish to fry and even if AAPL were to find support and bounce from this level, there are many other trades out there offering a much more attractive return potential IMO.  With that being said, here’s the original daily chart for the short, followed by today’s updated chart. The entire string of daily charts for the previous short and long trades can be viewed by clicking here.

Mar 012013
 

LL is one of my favorite short trades and is current backtesting the recently broken bearish rising wedge pattern, offering an objective short entry or add-on to an existing short position.  Suggested stops remain as original posted (~10% from entry) and as this trade was originally shorted at 64.87 when it was at the top of the wedge pattern, it still has a gain of over 7% from entry even after this initial bounce following the wedge breakdown.  My preferred swing target remains T2 (35.10) but for those who might only want to shoot for T1 (48.90), a stop about 1-2% over the recent highs (65.48) would be more suitable from an R/R perspective.  Updated daily & weekly charts:

Mar 012013
 

HLF 4 hourThis 4 hour chart of HLF shows the stock at a key resistance level with another resistance level (downtrend line) not too far above, thereby providing an objective short entry around current levels.  My preferred stop will be on a move 3-5% above the downtrend line with the next target TBD but most likely T3 on the previously posted daily chart (31.30).

Mar 012013
 

…there’s usually fire.  For those who have been following the HLF trades on the site lately, you’ll recall that the last update was made just a few days ago when the 2nd short trade hit T2 for another 19% gain following the 24% gain on the previous short trade that was closed out about 1 month ago today.  As a bounce off T2 this week was expected, I suggested booking partial profits or full and the stock has since bounced nearly 20% in just the three days since that last update.  However, I think that the time has come to recycle some or all of those funds back into HLF around current levels (HLF is trading at 40.86 as I type) as something’s rotten in the state of Denmark, or shall I say Icahnville?

I do not know all of the specifics on what Carl Icahn’s current stake in the company is or exactly how much of his stake is held through Icahn Enterprises (IEP) although I believe that IEP will be the primary beneficiary of most, if not all, of the profits or losses on Icahn’s HLF venture.  I can not continue to reiterate enough that this trade is only for aggressive & nimble traders and as always, DYODD (do your own due diligence) on any trade or investment that you decide to engage in.  You can click here to view the “supposed” reason for the 12%+ gap down in IEP today (but no mention of the fact that the stock is down over 30% since it’s recent highs in mid-Feb.

One could spend countless hours researching what Icahn’s latest position is in the stock and do their best to interpret his true intentions but the simple fact is that fundamental analysis is akin to driving a car while looking in the rear-view mirror.  By the time the required SEC and other disclosure forms are released, Icahn’s position will almost certain have changed (as well as Ackman’s, or anyone else’s, for that matter).  Ditto holds true when analyzing a companies fundamentals based on common metrics such as earnings, revenues, expenses, etc….  This information is typically up to 4 months old by the time it is released to the public (1 month lag +/- on the last quarterly (3 month) results).  That is why I will almost always put much more stock (pun intended) into the charts (technical analysis).

With that being said, it is this recent disconnect between the stock prices of HLF & IEP.  As you can see from these daily & 60 minute charts, IEP was pretty much a “dead money” stock for years now, only just recently coming back to a level not seen since 2008.  All of a sudden, IEP started going parabolic just before the public announcement of Icahn’s strategic short-squeeze plan to burn Bill Ackman.  As the zoomed in 60 minute chart shows, IEP & HLF has traded in a near-perfect correlation since then until very recently.  Btw- Those two board members that Icahn had appointed to HLF’s board came from IEP (no surprise really).   My reasoning for re-shorting HLF is largely due to this potential “tell” in IEP but more so for other reasons that I may comment on later, time permitting.

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