Herbalife Nutrition Ltd. develops and sells nutrition solutions in North America, Mexico, South and Central America, Europe, the Middle East, Africa, and the Asia Pacific. It provides science-based products in the areas of weight management; targeted nutrition; energy, sports, and fitness; and outer nutrition.
Take a look at the 1-year chart of Herbalife (NYSE: HLF) below with added notations:
HLF has stalled at the same $60 resistance area (red) twice over the past six months. The stock has recently turned higher, and now is sitting just a few percentage points below that $60 level. A solid close above the resistance should lead to another leg higher for HLF.
The Tale of the Tape: HLF has a 52-week resistance at $60. The possible long position on the stock would be on a breakout above that level with a stop placed under it.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT