NEW BEARISH Plays

Strayer Education - STRA - close: 68.53 change: -1.08

Stop Loss: 71.65
Target(s): 61.50
Current Gain/Loss: + 0.0%

Entry on August xx at $ xx.xx
Listed on August 22, 2011
Time Frame: 6 to 8 weeks
Average Daily Volume = 294 thousand
New Positions: Yes, see below

Company Description

Why We Like It:
We want to step up to the plate and take another swing at STRA. The oversold bounces continue to rollover. Now shares are hitting new multi-year lows. The $70.00 level should have been significant support and it's failing.

Part of our challenge is that the for-profit education stocks have been bearish for a while. The most recent data listed short interest in STRA at 41% of the very small 11 million share float. That raises our risk of a short squeeze. Given this risk I'd rather buy put options but the options spreads are too wide to trade.

The trend is down and we'll try and limit our risk by keeping our position size small. I am suggesting new bearish positions at the open tomorrow and we'll use a stop loss at $71.65. Our multi-week target is $61.50.

*Small Positions Only!*

Suggested Position: short STRA stock @ (the open)

Annotated chart:

Weekly chart: