For those who took the HLF short on Friday, be advised that Herbalife is scheduled to release their quarterly earnings report after the bell today. With all the buzz surrounding this stock lately, a gap tomorrow in either direction is therefore likely.
One other note to add is that HLF closed at the low of it’s trading range on Friday, 38.60, which was literally within 1/2 of 1% of the first profit target for the trade (T1 = 38.40). One thing that I strive to avoid on this site is hindsight recommendations (you should have bought XYZ then because; you should have sold ABC back then because; etc…) However, I checked out early for the extended holiday weekend and didn’t note the proximity of HLF’s close to T1 until after the bell, when it would have not done any good to make this suggestion: If your sole price target for HLF was T1, it would have made a lot of sense to book full or at least partial profits around the close on Friday as the trade already had (has) an 11.9% gain in less than one trading session. Considering this relatively large, very quick gain could have been booked a mere 1/2 of 1% from the price target and especially in light of the fact that we were heading into a 3-day weekend (which means the odds for any type news induced gap for either HLF or the broad market is increased), logically it would have made sense to just go ahead an exit the position so close to the final target before the close on Friday.
Again, I mention that only for a future educational example (I add these posts to the “Trading Tips” category on the site for future reference). I will also add that the stock is still trading around Friday’s close (current last trade in pre-market is 39.00) so the stock will most likely offer another chance to book partial or full profit before the earnings release later today. I did not cover any of my position Friday and my plan is to hopefully book partial profits at the first target today and take home a partial position to let ride into the earnings report (which I may add to or cover, depending on how that goes). I may also very likely add additional downside targets to this trade after the close today. Once again, for those in the trade, just be aware that the stock does report earnings tonight and therefore, make sure to adjust your position size commensurate with your risk tolerance and your trading rules regarding holding (or not) positions into earnings.