$EDU: Top of the range with odd fundamentals

EDU has tested and failed at the $108 level for the 3x in 20 months. Short-term price action has confirmed a break in the immediate trend.

This is a company which has sacrificed margins for earnings growth. Earnings growth is at +1 standard deviation while operating margins have crashed from 22.5% (end 2009) to a miserable 8.9%, at -2 standard deviation level. Either competition is too severe in the after school learning space (it is a very fragmented space) or EDU has lots of under-utilized learning centers which is dragging on margins. Furthermore, you have a company whose operating profits growth is slowing while eps growth is increasing???

With funny numbers, weak markets, weak spending power in China, weak USDCNY (EDU earns RMB reports in USD) and near +1 standard deviation valuations, I smell blood.