Add APOL Puts

Target a Re-Test at $52.50

By Bryan Bottarelli
Wednesday, March 19, 2008 12:26 PM EDT
Wed, 19 Mar 2008 16:26:00 GMT

PLAY: Buy the APOL April 55 Puts (OAQ PK) at or under $4.40, good for the day.

Dear Bottarelli Research Member,

Apollo Group (APOL – NASDAQ) is a company that I’ve wanted to short for quite a while. They’re a leading provider of web-based high school, college, and graduate levels educational programs — highlighted by their flagship University of Phoenix program.

APOL

As you can see from their chart, after hitting a 52-week high in January, the stock has fallen sharply — and I expect this weakness to continue. But yesterday’s big market rally is now handing us a prime opportunity to add puts, as the stock looks ready to take out its previous low at $52.50. They also have an earnings announcement scheduled for March 27th (a week from tomorrow), and considering the recent weakness of competing online education companies like CECO and ESI, we should expect more weakness ahead for APOL. Therefore, let’s go ahead and add April puts on APOL now!

PLAY: Buy the APOL April 55 Puts (OAQ PK) at or under $4.40, good for the day. Place a sniper sell at $5.30 and a protective stop limit at $2.50.

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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