I’m making a call on the short side for APOL. I feel that private education companies will be impacted by the lack of credit availability, slowing growth and higher unemployment constricting the pocketbooks of Americans. My target on the downside is $65. We see higher than average put buying activity at that price.
Apollo Group runs University of Phoenix. They’ve seen increased enrollment over the past several quarters, but with the US economy significantly deteriorating, I feel that this trend is poised to sharply reverse.
The charts show us that $78 is an area of long term resistance, so a stop around $81-82 is a prudent measure to protect against a potential breakout in this stock without giving in to higher than normal volatility.
