HFC was a long call on 6 June 2012 and it worked out pretty well. More recently, we suggested HFC was tired and it was likely time to move to the sidelines. All of the markups on the chart above are related to one or the other of those 2 posts on the stock.
We said at end of that second post that it would make sense to revisit if and when the stock closed back above the 200 day EMA.
That day has come… In fact, careful observation reveals that the stock recently made a higher intermediate low ($39.65) and is approaching the intermediate high ($47.21).
We think it’s time to return to a bullish posture and stalk HFC for low risk long entries. We anticipate retaining that stance as long as the stock remains above $39.65. We’d consider a close back below the 200 day EMA a warning shot from the stock, but we’ll use the higher low as the fulcrum for our bias since we’re so close to the 200 day EMA. In addition, support and resistance based on raw price (as opposed to a derivative of price like the EMA) is generally more powerful all else equal.