In addition to my short call on APOL, I’m making a short side call on GPC. This stock is intertwined in the automotive parts industry in Northern America and is poised to experience significant deterioration regardless of whether any bail out packages are passed by the US Congress. Recent talk of the bail out has been supporting the stock’s rally, but my analysis says that this stock’s run is out of steam.
Diminishing volume during a rally is a sign that it is going to fade. I am calling this short because I feel that American automotive business related activities, such as demand for parts and vehicles will diminish in this recessionary environment. My target on the downside is $36. A stop around $41 is prudent.
