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midasreturns (< 20)

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Herbalife tragedy averted!



May 03, 2012 – Comments (2) | RELATED TICKERS: HLF , DECK , GMCR.DL

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. 

For more on this read my blog - 


2 Comments – Post Your Own

#1) On May 04, 2012 at 7:47 AM, Morgana (< 20) wrote:

On your blog, you comment that HLF has no product to speak of.  You are in error.  They indeed have very fine products--protein drinks that are positively delicious and available in many flavors AND of which my doctor fully approves.  I respect your abilities with the numbers but, please, do due diligence on the actual product before making unsupported statements.  Oh, and to say that Mr. Einhorn does not have a dubious record . . that is seriously  questionable.  

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#2) On May 04, 2012 at 1:15 PM, dawnine (< 20) wrote:

Hmmm... I am an Herbalife distributor.  I am an Herbalife customer.  I fall into the category of "non-active sales force" as I do not sell to other people but maintain my distributorship simply for the discount I get when I buy the products (the snack bars and herbal teas are also divine).

 Over the last two years that I have been taking the products, my health has significantly improved and my doctor was surprised at my recovery after surgery (while strictly taking shakes and little to nothing else).

  Other friends who might be more active in the sales portion of herbalife have been WAITING for an opportunity to buy stock.   This is just the point where even I, the sceptic, am willing to jump in.  As always, I am in for the LONG HAUL, Einhorn be damned.

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