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Apollo Education Group, Inc. Message Board

  • tienxia0 tienxia0 Oct 29, 2013 4:09 PM Flag

    Both Apollo And Career Education Shares Went Parabolic This Week. Which One To Short?

    FYI - There is a compelling article on Seeking Alpha:

    Both Apollo And Career Education Shares Went Parabolic This Week. Which One To Short?

    Says much of the APOL run in the past few days was due to a "massive short squeeze" that will most likely implode after today.

    For a link, GOOGLE: "seeking alpha" short squeeze apollo

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    • For link to the article, GOOGLE: "seeking alpha" short squeeze apollo

    • Here's from the article comments:

      Today appears to be the LAST GASP of the massive short squeeze that has been at play with APOL. CECO seems to be retreating in profit taking moves as would be typical of a stock that isn't as heavily shorted as APOL.

      It is likely that APOL will follow CECO with a retreat/retracement that is perhaps more substantial. There's a reason why APOL's short squeeze has lasted 4 days:

      As anyone who has had a margin call knows, brokerages usually give you 3-4 days to wire in funds. Today is the 4th day of APOL's short squeeze, so the short-cover buying activity will most likely evaporate tomorrow.

      Here is the sequence of the recent short squeeze as I see it now:

      ---DAY 1, Thurs Oct 24th - 28% rise caused brokerages to forcibly liquidate some short positions who had too much exposure and not enough equity in their accounts.

      ---DAY 2, Fri Oct 25th - A further rise when brokerages called in other short positions and forcibly liquidated the rest that didn't get forcibly liquidated on Day 1.

      ---DAY 3, Mon Oct 28th - The remaining shorts who were not liquidated FORCIBLY by brokers are the ones who were given 3-4 days to wire in funds. Those that didn't get funds wired in by the close on Monday saw more forced margin call liquidations. That explains the huge jump trading volume in the last half hour and a surge to $27.95.

      ---DAY 4, Tues Oct 29th - Final day of margin call liquidations as shorts who didn't get their money in on Day 3, were seemingly immediately liquidated at the open. The stock shot up to $28.91 in the first 8 minutes of trading from a close of $27.95 (no news on the company to explain the rise).

      As Day 4 of the massive short squeeze comes to a close, the stock is fading into the close -- evidence that the short cover buying activity is depleted. Market makers know this (they have access to the limit-order book).

      Thus concludes the anatomy of an absolutely CLASSIC SHORT SQUEEZE...

    • Short EDMC. They reported tonight and it was not great. Edmc has had a massive run up in the past two weeks.

8.03-0.01(-0.12%)Sep 28 4:00 PMEDT