Choosing the Best Snake Oil Salesman
- Posted by Greg Harmon
- on June 26th, 2012
“Step right up and hear how this new wonder potion will change your life….” That is what you would hear at the carnivals of yesteryear. The world of medicine has come a long way since then all the way up to genetic signature drugs. But there are vestiges of that by gone era that remain and the pitch is not very different. Not to say that they are total cons but some products of the leading natural and health supplement companies rely a lot on faith. Despite that people buy. So which one is the leader? Which stock should you own? Let’s look at some charts.
GNC Holdings, $GNC
GNC Holdings, $GNC, started a run higher in October and is currently in a bull flag, having tested the 100 day Simple Moving Average (SMA). This has been support during the move up and should it prove to hold again a move over the flag at 38 would trigger a target on a Measured Move higher to 55. Short interest over 7% could help as well.
Herbalife, $HLF, got smacked off of its perch by a simple question from David Einhorn of Greenlight Capital on May 1. Since then it has based and is starting a move higher. It has resistance and a gap to fill at 48.38 higher with a move over that likely to drive to the downside of the previous range at 51.50. Not a bad 6% move, and with short interest closer to 10% it has fuel to move into the channel as well.
Vitamin Shoppe, $VSI
Vitamin Shoppe, $VSI, is consolidating at previous resistance in a bull flag near 55. The Relative Strength Index (RSI) is bullish and has been since December. A break of the flag higher carries a Measured Move to 59 but a pullback sees the 50 day SMA at 50 below, where it has found support several times since March. Look to enter on a beak above the flag on on a hold at that 50 day SMA. The chart favors the upside and short interest at over 10% provides ample fuel.
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
- Top Trade Ideas for the Week of September 2, 2014: The Rest
- Top Trade Ideas for the Week of September 2, 2014: The Rest Premium
- Top Trade Ideas for the Week of September 2, 2014: The Best
- Should Trading and Investing Really Not be Fun?
- SPY Trends and Influencers: Monthly Edition August into September 2014
- SPY Trends and Influencers August 30, 2014
- Macro Month in Review/Preview August into September 2014
- Macro Week in Review/Preview August 29, 2014
- Premium Earnings 8-29-14
- Stocks and Bonds Rising Together – Its Not So Strange