HLF was a recent short trade on the site which hit the final target for a 24% gain exactly 2 weeks after entry. I am once again shorting and adding HLF as an active short here and just as I cautioned in the last trade: This is for aggressive traders only.
I have multiple reasons for re-shorting HLF here with the primary reason simply being that the stock looks to offer a very objective R/R entry here on the backtest of the very same downtrend line that I initiated the previous short (where it stopped cold in it’s tracks and immediately reversed hard). That in no way means that the stock must or will reverse again, just that I can quantify my risk (1.30 cent downside vs. a 5.40 upside to my first target and an 8.30 profit potential to my current 2nd & final target..which may be extended as well).
Another reason that I like this trade is that apparently (besides Bill Ackman) everyone else is afraid to short the stock because Carl Icahn is jawboning the stock higher with the veiled (or not so veiled) threat of manufacturing a short squeeze on the stock. CNBC just paraded out one of their commentators who proceeded to lay down a strong warning against the shorts using an example of a company that he took an beating on a short squeeze years ago. This trade very well may not play out and a short squeeze could very well materialize (although my belief is that we’ve already seen it). But my downside, barring an overnight gap (which is always a very real and possible risk) well beyond my stop is a possibility. Interactive Brokers does current have plenty of shares available to short but one additional risk is having the shares called away from you early if a major squeeze was to materialize. As always DYODD and trade according to your own risk tolerance and trading objectives.