Wednesday, July 29, 2015

DeVry Education Group Inc (NYSE: DV)

DeVry Education Group Inc. provides educational services worldwide. It operates in three segments: Medical and Healthcare; International and Professional Educational; and Business, Technology and Management. The Medical and Healthcare segment operates American University of the Caribbean School of Medicine, Ross University School of Medicine, Ross University School of Veterinary Medicine, Chamberlain College of Nursing, and Carrington College. The International and Professional Education segment operates various institutions comprising Fanor, Ruy Barbosa, ‘REA1, Faculdade Boa Viagem, Centro Universit’rio Vale do Ipojuca, Faculdade Diferencial Integral, Faculdade DeVry Sao Luis, and Faculdade DeVry Joao Pessoa, which primarily offers undergraduate and graduate programs in business, management, medical, healthcare, law, and engineeringThe Business, Technology and Management segment offers career-oriented masters, bachelors, and associate degree programs in technology, science, business, and the arts.
Take a look at the 1-year chart of DeVry (NYSE: DV) with the added notations:
1-year chart of DeVry (NYSE: DV)
DV has been trending lower since its December peak near $50, but the stock finally found some support towards the end of April. Since that low the stock has been holding a 52-week low support at $30. A break of that level would most likely lead to much lower prices for the stock.

The Tale of the Tape: DV has a key level of support at $30. A trader could enter a long position at $30 with a stop placed under the level. If the stock were to break below the support a short position could be entered instead.

Are Semiconducters $SOX A Buy?

From a more structural perspective Semiconductors have been a space we’ve wanted to stay away from for most of the year. Every time the sector index made new highs, it quickly failed. This along with consistent bearish momentum divergences on multiple time frames over the past year have kept us in the cautious camp and we’ve preferred to look elsewhere for long positions.
Looking at the PHLX Semiconductor Index, prices today are exactly where they were a year ago. This is essentially a basket of chip makers including the likes of Qualcomm, Texas Instruments, Intel, Broadcom, etc. The first chart shows the weekly candlesticks coming down to former resistance from last year (shaded in gray) that also served as support earlier this year. Notice how we are also right at this uptrend line from where this rally first got going in the second half of 2012.

With momentum putting in lower highs over the past year while prices rallied and then failed after each new high, we’ve been gun-shy on the long side. Looking at it today, RSI has held near the 40 level without getting oversold. That’s a good thing. If prices can hold onto this support and can prove it can stay above this uptrend line, I think that structurally this would be very positive.
Here is a closer look at the Semiconductor Index. Notice the bullish momentum divergence as RSI put in a higher low while prices made new lows over the past week:

The way I see it, there is a ton of potential here if prices can hang on to these levels. We only want to be long semi’s if prices are above this uptrend line. If prices cannot get/stay above it, then I do not see any reason to be involved on the long side. The levels are very well defined, which is what we want.
We can have potentially 75 points to the upside in this Index, but again, we would only want to be long if we can get above and stay above this uptrend line. If that doesn’t occur, then this is a moot point. Either way, the level is clear and I believe it’s well worth watching.

Other Commodities are Doing Far Worse Than Gold

Macro Man has been thinking a bit more about commodities recently, and before addressing the upcoming Fed meeting in another post later this week, he thought it would be useful to follow the line of thought.
Commodities generally, and gold in particular, have been in the headlines recently given their sharp price decline.  Some, indeed many, commenters have expressed the idea that gold is oversold, below its equilibrium level, due for a bounce, etc.    While short-term momentum indicators have certainly reached oversold levels (and are exhibiting a bit of positive divergence), Macro Man thought it would be useful to put the recent price decline in a longer-term perspective. (more)