For those in the HLF short trade, please note that I have added a 3rd target at 31.30. As expected, HLF put on the full-court press against the shorts by raising guidance for 2013 (I have already shared my guidance in the HLF Fundamental Ramblings post, which is in stark contrast to the company’s). Of course, I expected nothing less from Herbalife as it does all it can to assist Icahn in his efforts to squeeze Ackman and what is probably a relatively few others (myself included) still short the stock. Either way, here’s the updated chart with the new final target. Of course, this remains an aggressive trade and due to the battle (ego war) between the investment titans, HLF can turn on a dime. Therefore, make sure to adjust your stops appropriately in order to protect profits on the trade and keep your position size commensurate with your risk tolerance (e.g.- How much damage would a 30%+ opening gap against your position do to your portfolio?) I may continue to extend the final target on this trade to the 25 area and possibly lower. However, it is just too early to make that call from a technical and/or fundamental perspective. I will say that the fact the stock is down 5% with the following headline pasted all over every financial media outlet today does bode well for the trade longer term: Herbalife Beats Earnings Estimates And Raises Guidance
