There’s a group to watch this week and next. I’m talking about education stocks, which we’ve written about regularly in many of investment advisories, including this one. While December was a quiet time for most indexes and stocks, it allowed many groups to build basing structures–I’m talking about multi-week bases, where stock gets transferred from weak hands to strong hands–which could propel them to gains in 2009.
Education stocks are no exception, with stocks like Apollo (APOL), DeVry (DV) and Strayer Education (STRA) all consolidating relatively quietly in recent weeks. I wouldn’t say the group is strong … but that could change.
Apollo Group is basically the gorilla of the bunch, and it’s reporting earnings on Thursday, January 8. My general thought is this: If Apollo’s numbers and outlook are met with skepticism, then all bets are off. Just move on.
But if they’re greeted with enthusiasm, it could propel not just APOL, but also DV, STRA and others much higher. And because all these stocks are in basing patterns, any big-volume rally could represent the start of a major upmove!
Of course, education stocks aren’t my favorite group; the growth in these companies is solid but not spectacular. But there’s nothing wrong with getting on board a stable leader as it gets off its launching pad. Keep an eye on these stocks this week and next to see whether any take flight.