Not much time to explain, but today (Thursday), I will be building a list of short position in health-care related stocks if AFAM cannot breakout above 50 soon. I am expecting a sector-wide correction, led down by AFAM and ISRG. We should get one checkpoint with ISRG down, but the key here is AFAM which coincidently did good on Wednesday.
I am still longterm bullish on CSKI, but will wait for a high volume selloff to enter. So this is my one spot for a hedge.
This is really tough for me to do since I’m a AFAM fan, but if we don’t get follow-through soon I can see this heading back to the 30s. Yikes!
I would be cautious shorting education stocks here, especially if STRA can hold the 189 area. There’s actually one education stock I want to get long, ***E. It’s too early to call a top in APOL, so until you see STRA and APOL both reversing, then the dips must be bought in this sector.
… I’m trying to figure out why education stocks are in their own bullish cycle? My guess is that there must be some kind of correlation between our rising unemployment with the demand for higher education. Which makes sense a little… people generally feel that if they have extra education, then their chances of getting a job will be better. I could be on to something.
-gio-
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still short on EDU,
rolling the dice..it might have a little more room to fall.
looking forward to your healthcare shorts.
keep´em coming!!
Bet your bottom dollar that education stock you asterixed is recent IPO, LOPE. 😉
As for AFAM, there’s no way that stock will be making 52-wk highs in a full-scale Depression, sporting a 25 P/E. It looks to me to be forming a long-term H&S pattern. Aug-October 08 is the left shoulder, November-December, the head… you know how it goes. It looks like a good short with a loose stop at 51. This looks like it’s headed to the 30-35 area this year.
-Phil (back from Rio today)
Gio:
I’m at a university, and I’ve never seen ALL of the classes closed before we start. There are always increases in enrollment in a recession, but there are other (good and bad) factors involved. For instance, some scholarships/stipends give students (of whatever age) cash to live. So, it’s real. The internet bullshit courses will continue to go off the scale.
Aloha bro…
Also, all of the big pharma/insurance (LLY;WLP;MHS) etc. have been toast for about 10 days. Go for it…
Gio,
Worked in education marketing for 10 years, education is a recession-proof business.
The newly unemployed have access to state and federal retraining grants to help with tuition, and they use cash payments from severance packages to help cover the costs.
In my area, days after an employer announces a major layoff, all of the educational institutions will hold an “education fair” at the company to inform the employees of available academic and vocational programs, and all available financial aid options.
Recessions create a lot of career changes and education is normally the first step in the process.
NFLX looks like an interesting short here. Stock is at multiple levels of resistance. And, it’s a retailer that’s not oversold.
We have a couple of education clients (one strictly healthcare edu) and they are doing well.
__________
Along the lines of what some other guys are posting about Commercial Real Estate. My dad is a CPA in the DC area that has a big commercial real estate/developer client. S*it is going to hit the fan this year, they can’t get any loans to replace loans that the banks are calling, the banks are playing hard ball with negotiating rates so they don’t dafault, low occupancy, nothing selling. They are a big private company, planning for bankruptcy. He gets choked up when he talks about how bad he believes things will get, and I never see him like that, so watch out, short if you can. On a side note, I head Cramer recommend REITS the other day! On health care, on NPR the other day the a CFO for a hospital was talking about not being able to expand because the cost to issue bonds has gone up drastically, more news against commercial real estate/ REITS.
Hey Phil, that was supposed to be a secret. Lol.
@DEtrade, that sounds about right. CPAs know when a business is in trouble.
@Dogwood, “Recessions create a lot of career changes and education is normally the first step in the process.” … so true. i’m tweeting this.
That is one of the things I am worried about. I decided a year ago this past fall to go back to school and get my MS in Finance in hopes of a career change to the financial field. I don’t get my degree until Spring 2010, now I am concerned there will be a ton of new grads and people with lots of finance experience looking for work when I graduate.