Option Investor

A "Key" Moment!

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Despite the broad market retreat earlier this month, the
majority of bullish positions in our portfolio are performing
well. However one play; Career Education (NASDAQ:CECO),
is showing signs of technical weakness and it deserves our
attention in the coming sessions.

Chart: http://finance.yahoo.com/q/bc?s=CECO&t=6m

Wednesday's move below a short-term support area near $39
does not bode well for the issue and with the closing price
at the confluence of a number of common moving averages,
any further downside activity will likely produce additional
selling pressure. Also, the poor relative strength of the
underlying market sector suggests that the recent lack of
interest in Education & Training stocks may continue for
some time.

Our spread has a "break-even" basis of $34.35, so there is no
reason to close the position until a more definitive downtrend
is established. At the same time, there seems to be little
reason for renewed buying and when that condition exists,
a substantial decline may occur sooner than you think...

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