Rhetoric Aside, Where Does HLF Really Go From Here? 2.19.2013

[shareaholic app="share_buttons" id="24556347"]

Investors continue to ask the question… where does Herbalife go from here?

Well, Icahn believes the answer to that question is up. In his most recent appearance on CNBC, Carl said, “I buy things I think are undervalued.” From this statement it’s clear that he’s banking on making money from being long HLF.

I know quite a few investors will take his word and get long HLF as well…but do the charts line up with Icahn’s current view? Lets check it out…

Going back to the lows made in early 2009, it looks like a clear five waves completed in April 2012 at $73. Since that high, there as been a strong reversal, but it was done so in a corrective fashion (three waves). This tells me one of two things… one being that we are going to see a strong reversal right here ($38-$44), to bring us down in a fifth wave completing near the $10-$15 region. The second being that we have bottomed at $24, and will now begin a stronger third wave up that could take a couple years to complete.

When looking at both of these possibilities, the most probable scenario that I see playing out is a third wave up. The MACD is portraying some nice positive divergence, and gives me more confidence that we will see higher levels before we see lower. My initial targets are the $55-$63 region for (iii) of 3 before we see a stronger consolidation in (iv) of 3. By year-end I could even see wave 3 ending up near $72-$80!

When putting counts on a stock, you always need to have stops that invalidate your current position. If the price action falls below the $30.73 that would be my first indication that we are in a fifth wave down, with $23.91 being the nail in the coffin for the bulls. Bulls do not want to see it below that level!!

In the long I am optimistic on Herbalife, and have to say that Carl Icahn might have snagged up a ‘diamond in the rough.’

HLF 3Day 2.18.2013

Author: Peter Nitso
pnitso@yahoo.com
Twitter: @PeterNitso

LNKD Surges (LNKD, QQQ, FB) 2.8.2013

[shareaholic app="share_buttons" id="24556347"]

 The options were expecting about a $9.00 move in the stock and according to current prices, the move is going to be outside of that. The ‘at the money’ straddle was just about $9.50 too.  Today’s move was basically unlikely, according to what the options were implying yesterday.  LNKD is probably going to open up at a new all time high. Bullish fundamentals are paired with bullish management.

Analysts are moving around their PTs. BMO Capital Markets maintained LNKD at market perform, but raised its $130 PT. JEF held on to its buy rating and increased its PT to $170.

Salerno.mark.a@gmail.com

Screen shot 2013-02-08 at 7.45.29 AM