With the recent volatility in the stock market, it would be easy to assume that all stocks have broken their respective up trends. Certainly most stocks have, but maybe not all? Stocks that have maintained their trend higher through the current market volatility could be the ones that hold their ground best during any future pullbacks. One such stock holding its current trend higher is that of Apollo Group Inc.
Apollo Group, Inc. is a private education provider. The company offers educational programs and services both online and on-campus at the undergraduate, master’s and doctoral levels through its wholly owned subsidiaries, The University of Phoenix, Inc.; Institute for Professional Development; The College for Financial Planning Institutes Corporation, and Meritus University, Inc. Apollo Group also formed a joint venture with The Carlyle Group, called Apollo Global, Inc., to pursue investments primarily in the international education services industry. The University of Phoenix offers associate’s, bachelor’s, master’s and doctoral degrees in a variety of program areas. The Institute for Professional Development provides program development, administration and management consulting services to private colleges and universities.
To review Apollo Group’s stock, please take a look at the 1-year chart of APOL (Apollo Group, Inc.) below with my added notations:
APOL has been in a steady up trend all year and actually came close to hitting a new 52-week high as recently as a month ago. Along the way, APOL has formed a nice trend line of support (green). Always remember that any (2) points can start a trend line, but it’s the 3rd test and beyond that confirm its importance. As you can see, APOL’s trend line is VERY important to the stock. Also, APOL has formed a short term, down trending resistance line (red) over the last several weeks.
The Tale of the Tape: APOL has been steadily trending higher all year and has created a nice trend line of support along the way. A long position could be entered on a pullback to the trend line support, or on a move above the down trending resistance line. A short position could also be entered if APOL broke the trend line of support or at the down trending resistance.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT