This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Heavily Shorted Stocks That Could Pop on Earnings


Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

My first earnings short squeeze candidate is Photronics (PLAB), which is set to report its results on Tuesday after the market close. Phototronics is a manufacturers of photomasks, which are precision photographic quartz plates containing microscopic images of electronic circuits. Wall Street analysts, on average, expect Photronics to report revenue of $131.78 million on earnings of 19 cent per share.

This stock has been absolutely hammered going into earnings, with shares dropping from a recent high of $10.13 a share to its current price of around $5.70 a share. This big drop has created a potentially oversold condition from which the stock could bounce sharply if the bulls hear what they want.

The current short interest as a percentage of the float for Photronics is a rather high 12.4%. That means that out of the 51.67 million shares in the tradable float, 7.05 million are sold short by the bears.

From a technical standpoint, shares of Photronics are trading below both its 50-day and 200-day moving averages, which is bearish. The stock has recently bounced from a low of $5.24 a share to $6.32 a share. The current reading on the relative strength index is showing an oversold condition at 33. Oversold can always get more oversold, but if the price trend starts to change here for Photronics, then we could see a bounce.

I would only be a buyer of this stock after its report if you see it trade above $6.32 a share on heavy volume. Look for volume that's greater than or close to its three-month average volume of 929,000 shares. I would look for a run towards its 50-day ($7.76) and 200-day ($7.66) moving averages if the stock clears $6.32 with volume. I would only short this stock after its report if shares slip below $5.24 on heavy volume. I would target $4.50 to $4 a share if the stock fails to hold above $5.24 after they report earnings.

2 of 6

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,979.13 +59.54 0.35%
S&P 500 1,986.51 +4.91 0.25%
NASDAQ 4,526.4820 -1.0320 -0.02%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs