APO has several layers of technical support in place
The shares of Apollo Global Management (NYSE:APO) have broken out of a downtrend that consolidated in the back half of May. The stock is creating separation from its year-to-date anchored volume weighted average price (AVWAP) level and 20-week moving average, while taking out the weekly closing high of $65 – an area that capped gains since early April. APO is also currently trading above all major moving averages, with the 20- and 50-day trendlines providing potential support as they curl higher.
May earnings candles have been supportive on all recent pullbacks. Plus, the equity’s relative strength index (RSI) bumped into the round 50 level and rolled lower while in a negative divergence.
In terms of options-related support, the 75-strike could act as a magnet, especially if options traders’ pessimism unwinds. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), Apollo Global Management stock sports a 50-day put/call volume ratio of 2.40 that shows puts being picked up a faster rate than calls.
APO is seeing attractively priced premiums at the moment, per its Schaeffer's Volatility Index (SVI) of 34%, which sits in the relatively low 14th percentile of its 12-month range. Our recommended call option has a leverage ratio of 6.78, and will double on an 12.4% pop in the underlying shares.
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