Herbalife (HLF) : With all this attention being paid to Bill Ackman and his various investments lately, how could we not visit with the charts and indicators?
In this daily chart of HLF, above, we can see the movement of the stock for the past 12 months. I guess someone more nimble than me could trade it, but I don't see how. From March to October, HLF does move a little higher but the pullbacks and retracements are pretty deep, so setting stop-loss orders becomes a problem, at least for me. A break of the rising 200-day moving average in early November starts a decline to a December low. Prices rebound in January and February and for a week or two close above the now-declining 200-day average line. The On-Balance-Volume (OBV) line peaks in July and moves lower into the new year suggesting that sellers have been more aggressive for many months. A bearish divergence in January and February between the higher price highs and weaker momentum reading seems to be playing out in March with a fresh decline.
There are a number of bearish signals in this three-year weekly chart of HLF, above. Prices are below the declining 40-week moving average line. The weekly OBV line is neutral at best and the MACD oscillator looks like it is moving to a fresh sell signal below the zero line.
Bottom line: HLF has some nearby support in the $50-$48 area. A close below $48 will weaken the charts and indicators with $45 and then $40 the next likely price targets if we break below $48.