HLF Position Follow Up

Our HLF position is doing well and it's not because of Ackman's "knock-out" blow presentation proving HLF is a fraud, it's not because of the Icahn/Ackman spitting contest, it's just based on the charts and the rest I pretty much have to ignore, even though I don't care to be on the other side of an Icahn trade.

Our current P/L after adding to HLF last week on the post Ackman Knockout presentation bounce now sits at...

12.55% and the top is just getting started.

This is the daily chart, a H&S (volume confirmed) and negative divergences through it. These are the 3 places I'll short a H&S, the head, the top of the right shoulder and after a break below the neckline there's almost always a shakeout of new shorts so where the "X" is, is actually a place I'd consider going long as new shorts entering on the break of support are run out of the trade. We just added to HLF at #3.

Here are the recent posts...

July 22nd: Adding 25% to HLF Short Position
July 22nd: HLF Trade Follow Up
July 28th: HLF Short Position Follow Up /Earnings

 This is the shakeout move after the H&S neckline was broken and the last area I'll short a H&S top.

We got lucky as the day before Ackman's presentation HLF fell as he made the rounds telling everyone he had proof they were a fraud. The next day of the presentation we saw a positive 5 min divegrence, not enough to change anything, but enough to move the stock significantly over a short period,  as I sais that day, I suspect this was Icahn trying to humiliate Ackman (they were in a shouting match on CNBC before Icahn entered the trade trying to squeeze Ackman out)  on the day Ackman gives his presentation HLF runs away 25.45%, its biggest 1-day move and a useful entry for us to add to our short.

 This is the 15 min chart, this is one of the reasons I wasn't worried about shorting that strength, it was a short term divegrence for a short term move, thus useful for entering a short at a better price with lower risk.

This is the 5 min chart since. We have solid downside confirmation after HLF blew earnings as they've been blowing cash on share buybacks or a cheap gimmick to keep share price up while adding no capacity to the company...

Right now we got in above the neckline and are back below the neckline, this top should be just getting started.

Add-to at the red arrow and back below the neckline with likely significantly fewer shorts this time.