Herbalife tragedy averted!
Last few days have shown why trading momo stocks can be as dangerous as rope walking in Nepal.
Herbalife was my favourite for sometime -
Amazing quarterly profits and surprises - quarter after quarter, year after year. An excellent CANSLIM, IBD50 candidate. I bought it after Feb 21st earnings beat at $64.3. It was a beautiful break out.
On April 30th , it delivered another stellar earning. It beat street by almost 10% but the guidance for Q3 was just inline with consensus.
Stock started correction, but I left a buy order for HLF at $68.5 untouched. These stocks tend to bounce off 50DMA and the report wasn't as bad as Decker's report. The stock purchase happened at $68.4. But in morning the tide seemed to have changed.
Stock breached the 50 DMA on heavy volume andIt ripped through the previous support.
Both these event signaled selling by institution had begun. So I bailed out. See a screenshot of actual account trades for 5/1/2012.
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