Mike Khouw's Apollo Group (APOL) Trade

CNBC Options Action's Mike Khouw said on the show that Apollo Group, Inc. APOL has been under a lot of pressure recently. The media coverage hasn't been that good, and there are some regulatory concerns for the sector. He also said that after a big sell off, this stock started to show some value. Apollo Group, Inc. (APOL) is trading at 7.5 P/E multiple, and its EV/EBITDA is equal to 3.5. Carter Worth is also bullish on this stock. He spotted a bearish to bullish reversal, and pointed that Apollo's (APOL) 150-day moving average is starting to rise. He also showed a trend line for the last two years. The trend line is showing a down trend, but the stock is currently trading against the trend line. Carter Worth also noted that the situation is similar in the sector, and he expects Apollo (APOL) to make the turn and head higher. Mike Khouw suggested that investors should consider an options strategy in Apollo Group, Inc. (APOL). Specifically, he wants to sell the May 50 call for $0.50, and buy the May 45 call for $1.90. He also wants to sell the May 39 put for $1.00. This trading strategy would cost him $0.40, and the break even is at $45.40. Apollo Group, Inc. (APOL) is going to report earnings on March 29th. On Friday, it gained 0.35%, and closed at $43.51.