Below are the updated daily & weekly charts for the HAIN short trade posted just before the close today. Note that the shaded price levels at the end of some of the horizontal lines on my charts are the levels of the horizontal lines, not the suggested price target. Price targets on short trades are typically placed slightly above the actual support/expected bounce level in order to minimize missing a fill, should the stock reverse just shy of support. Ditto for long trades with price targets placed just below the actual resistance level. The prices targets for HAIN are T1 at 80.07, T2 at 76.32 & T3 (the current final target) at 72.39. Those targeting only T1 or T2 might consider a stop on a solid intraday break or close above the uptrend line while those targeting T3 or lower, as additional downside targets may be added to this trade, might consider a stop over the 90.50 area as that is about 90 cents above a decent horizontal resistance level.
Looking at the longer-term technical picture for HAIN (this 10 year weekly chart), we can see that prices are wedging higher above a well-defined by aging uptrend line that has defined most of the bull run in this stock since the early 2009 lows. The strong negative divergences in place on this recent thrust to new highs in HAIN helps add to the longer-term bearish case for the stock as does the very large red volume bar put in on the selling this week. As you can see, HAIN is prone to its share of intraweek breaks below that trendline, each one serving as a bear-trap & the catalyst for the next thrust higher in the stock. In fact, over the last two and a half years, there have been four large intraweek breaks below that uptrend line as evidenced by the weekly candlestick tails (shadows), with prices closing back above the trendline in each instance. Hence my preference to wait for a solid weekly (end of day Friday) close below that weekly uptrend line before establishing a longer-term swing short position. Of course, if this current trade based off the daily chart does begin to play out, prices should be below the weekly uptrend line by the time T2 (second price target) is hit.
The 40 week EMA (red line) has also acted as support for the bulk of this bull market in HAIN & currently comes in just below the uptrend line. Therefore, any solid close below these intersecting key support levels (trendline & 40 week EMA) would likely signal the end of the 5 year bull market in HAIN and the beginning of a new bear market that could take the stock down to the 52 and possibly eventually the 35 area, roughly 40 & 58% lower. First things first though and that would be to see prices begin to move lower at or before the 89.60 resistance level. In continuing to keep things light for now, I decided to only short a half-position of HAIN before the close today & will look to add if both HAIN & the broad market reverse & continue to move lower again soon.